Key Highlights

• Champion Iron released its FY2027 second-quarter results on 28 October 2026 in Montréal, which was 29 October in Sydney.

• Revenue was $403.9 million, compared with $356.9 million in the previous quarter and $492.9 million a year earlier.

• The company recorded a net loss of $48.4 million, or $0.09 per share, against Net Income of $56.8 million in the same quarter of FY2026.

• EBITDA was $3.7 million, while adjusted EBITDA was $23.3 million, down from $174.8 million a year before.

Why has Champion Iron (ASX:CIA) reported a net loss when it shipped a record Volume of iron ore? The short answer is that lower realised prices, higher freight costs and a weak first period of ownership at its Norwegian mine outweighed the extra tonnes in the quarter ended 30 September 2026. All figures below are in Canadian dollars unless stated otherwise.

The result in brief

Champion Iron released its FY2027 second-quarter results on 28 October 2026 in Montréal, which was 29 October in Sydney. Revenue was $403.9 million, compared with $356.9 million in the previous quarter and $492.9 million a year earlier.

The company recorded a net loss of $48.4 million, or $0.09 per share, against net income of $56.8 million in the same quarter of FY2026. EBITDA was $3.7 million, while adjusted EBITDA was $23.3 million, down from $174.8 million a year before.

Consolidated sales reached a record 4.49 million dry metric tonnes, with 3.91 million from Bloom Lake in Québec and 0.59 million from Rana Gruber in Norway.

What Champion Iron does

Champion Iron is an iron ore miner listed on the ASX and the Toronto Stock Exchange. Its core asset is the Bloom Lake mine in the Labrador Trough, Québec, which produces iron ore concentrate.

Revenue depends mainly on the seaborne iron ore price, usually benchmarked against the 65 per cent iron index (P65), and on the premium that higher-purity product can attract over the 61 per cent index. The company states that Bloom Lake products earn such a premium, but it did not quantify it in the latest release.

In April 2026 the company completed the Acquisition of Rana Gruber in Norway, which produces roughly 1.8 million dry metric tonnes a year. It also holds 51 per cent of the Kami Partnership, with Nippon Steel and Sojitz as partners, which is developing the Kami project about 21 kilometres south-east of Bloom Lake.

Why prices and freight hurt

The gross average realised price was US$105.5 per dry metric tonne, compared with a P65 index average of US$112.8 for the quarter. Provisional pricing adjustments reduced the realised figure by a further US$1.1 per tonne.

Freight and other costs rose sharply, reaching US$40.4 per tonne, which the company says is 39 per cent higher than a year earlier. After those deductions, the net realised price was US$64.0, or $89.9 in Canadian dollars. That is 16 per cent lower than the previous quarter and 30 per cent lower than a year earlier.

Management said the rise in the C3 freight index, a Brazil-to-China benchmark, should keep weighing on net revenue in coming months because most vessels are booked three to five weeks ahead.

Costs and unit margins

The consolidated C1 cash cost was $82.9 per tonne sold, or US$59.2, with Bloom Lake at $82.5 and Rana Gruber at $85.3. All-In Sustaining Cost was $97.9 per tonne.

With the net realised price at $89.9, the cash operating Margin was negative $8.0 per tonne, compared with a positive $31.1 a year earlier.

Rana Gruber contributed $54.3 million of revenue in the quarter but a gross loss of $11.5 million.

The direct-reduction strategy

The most important strategic project is the direct-reduction grade pellet feed upgrade at Bloom Lake. The aim is to convert up to half of the mine's capacity into a product of up to 69 per cent iron, which is aimed at steelmakers using direct-reduced iron routes that favour higher purity feed.

Construction is complete and the project is in commissioning and ramp-up. The first commercial shipment has been made, and further test cargoes and commercial agreements are scheduled for the third quarter of FY2027. Output was about 0.6 million wet metric tonnes, flat on the previous quarter. Product quality is improving toward target specifications but has not yet reached them.

Cumulative Investment stands at $497.0 million, in line with the earlier estimate of about $500 million, and start-up costs were $6.9 million in the quarter. Whether the higher-grade product achieves a durable premium is unproven, and the company lists customer acceptance and ramp-up delays as risks.

Balance sheet and liquidity

Cash, excluding unused partner contributions to the Kami Partnership, was $214.4 million at 30 September 2026, up $15.7 million from the end of June. Available Liquidity was $618.4 million, compared with $653.1 million at 30 June, including $404.1 million of undrawn Credit facilities.

The release did not state total debt, which is covered in the accompanying management discussion. It does list compliance with credit Facility covenants, including the expiry of temporary covenant relief, as a risk. In May 2026 the company had announced a new US$150 million four-year term Loan and extended its facilities to April 2030.

The earlier Dividend policy, announced in May 2026, targets 30 to 40 per cent of trailing six-month free Cash Flow from the FY2027 semi-annual results. The latest quarterly release does not mention a dividend, so any payout will depend on cash generation.

Sector conditions and competition

Champion Iron competes in a seaborne market dominated by much larger producers in Australia and Brazil. Its edge is product quality rather than scale, together with a location that gives access to European and Asian customers from the Atlantic basin.

That positioning exposes it to trade policy. The company points to the European Union safeguard framework and the carbon border adjustment mechanism, both of which could influence Demand and pricing for imported steelmaking inputs.

Risks and what to watch

The principal risks named by the company are iron ore prices, energy and fuel costs, freight, covenant compliance, the direct-reduction ramp-up, trade measures, currency exposure and the Rana Gruber integration. No numerical guidance was provided.

Upcoming points to watch include the third-quarter test cargoes and commercial agreements for the new product, progress in lowering costs, and freight movements.