Vale Reports Third-Quarter Financial Results

RIO DE JANEIRO/SAO PAULO (Reuters) – Brazilian miner Vale, one of the world's largest iron ore producers, announced on Thursday a 15% decline in its third-quarter net profit compared to a year earlier, affected by lower prices of steel-making ingredients and increased provisions related to the Mariana dam collapse.

Despite this, Vale posted a net profit of $2.41 billion for the quarter ending in September, significantly exceeding analysts' estimates of $1.65 billion as polled by LSEG.

Vale's net revenue also fell, declining 10% year-on-year to $9.55 billion, close to the anticipated $9.44 billion projected by analysts.

Earlier this month, the company announced its third-quarter sales and output report, indicating the highest iron ore production since 2018. However, it faced challenges with a 14% drop in realized prices of iron ore fines, impacting profitability.

The company's adjusted EBITDA stood at $3.62 billion, down 18% from the previous year, but in line with analyst predictions of $3.61 billion.

In its earnings report, Vale disclosed a provision of $956 million related to the tragic dam collapse at the Samarco mine, a joint venture with BHP, which occurred near Mariana in 2015. The company expected this impact, as negotiations for a final compensation deal with Brazilian authorities neared completion. Vale is set to finalize this agreement soon, involving a total payment of 170 billion reais ($30 billion), with 100 billion reais to be disbursed over 20 years to public authorities.

Newly appointed CEO Gustavo Pimenta emphasized the importance of improving product quality and enhancing client focus. He mentioned plans to accelerate efforts in providing high-quality iron ore products and expanding the base metal unit, especially in copper.

Additionally, Vale raised its all-in cost guidance for copper for the year.

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