Warning: Champion Iron shares slide as profits take a hit

Champion Iron Ltd (ASX: CIA) shares are sliding on Thursday after the iron ore producer released its fourth-quarter results.

The Champion Iron share price is down 3.39% to $4.84 at the time of writing.

It has been a mixed ride for shareholders. Champion Iron shares are down about 20% in 2026, despite still being up around 14% over the past year.

Here’s what happened in the 3 months ended 31 March.

Production lifts despite rail disruption

According to the release, Champion Iron produced 3.4 million wet metric tonnes (wmt) of high-purity 66.2% iron ore concentrate during the quarter.

That was up 8% from the same period last year.

The company said the result reflected stronger productivity and improved iron recovery at its Bloom Lake operations in Canada.

Sales volumes were also solid, coming in at 3.5 million dry metric tonnes (dmt). That was broadly in line with the prior corresponding period.

The miner said this was achieved despite rail service disruption caused by a third-party train derailment in late December.

This affected operations through part of the quarter, although rail service later resumed.

Champion also said its direct reduction pellet feed project remains on schedule.

The project is designed to upgrade about half of Bloom Lake’s capacity to produce higher-grade material.

Initial production tests were completed in March, with commercial production expected by the end of the June quarter.

Profit takes a hit

The weaker share price reaction appears to be coming from the financial side of the result.

Revenue fell to US$414.5 million for the quarter, down from US$425.3 million a year earlier.

Earnings also moved lower. Champion Iron reported EBITDA of US$114.3 million, compared with US$127.4 million in the prior corresponding period.

Net income fell, dropping to US$23.2 million from US$39.1 million.

Costs are also receiving attention.

Champion reported a C1 cash cost of US$82.7 per dmt, up from US$80 a year earlier.

Its all-in sustaining cost (AISC) rose to US$96.9 per dmt, compared with US$93.1 last year.

The company pointed to higher freight and other costs, including pressure from the C3 freight index.

It also said the lower EBITDA and margin were mainly driven by a stronger Canadian dollar against the US dollar.

Champion’s average realised selling price was US$120.0 per dmt, slightly below the P65 index average of US$120.8 over the period.

Cash and dividends stay in focus

The company ended March with US$296.8 million in cash and cash equivalents.

It also had US$515.5 million in available loans and total cash, working capital, and available credit facilities of more than US$1 billion.

Champion Iron also announced a revised dividend policy.

Under the new framework, future dividends are expected to equal 30% to 40% of free cash flow.

Despite this, no dividend was declared for the March half.

Management said this reflected a focus on preserving liquidity during volatile macroeconomic conditions.

The post Warning: Champion Iron shares slide as profits take a hit appeared first on The Motley Fool Australia.

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• Buy, hold, sell: Mineral Resources, Fortescue, Champion Iron shares
• Champion Iron announces production gains and new growth projects

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.