Under the impact of iron ore prices on the international market, which declined between January and March, Vale (VALE3) is expected to show lower profits and Ebitda in the first quarter balance sheet, despite the positive production and sales results, according to analysts.
The results for the period will be released this Wednesday (24) after the market closes.
The estimate made by the Broadcast Previewswhich calculated the average of projections from six houses (Genial, XP, Itaú BBA, BofA, BTG and Citi), pointed out that Vale’s net profit in the first quarter of 2024 will be US$1.74 billion.
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If the data is confirmed, it will represent a decline of 5.27% compared to the same period in 2023.
Ebitda (earnings before interest, taxes, depreciation and amortization) is expected to reach US$3.423 billion, a decrease of 4.27% on the same basis of comparison. Net revenue is expected to reach US$8.46 billion, an increase of 0.34% compared to the same period last year.
In the quarter, the prices charged by Vale for ore were below those recorded last year. For fines, the figure was US$100.7 per ton at the beginning of the year, according to the production and sales report presented last week, compared to US$108.6 recorded in the first quarter of 2023, a decline of 7.3%.
“We project net profit to fall by 20% year/year, due to weaker price dynamics in fines and an increase in the pace of provisions for the Mariana accident,” said Genial in a report, whose projection is the most pessimistic among the houses consulted.
Bank of America, in turn, cites, in addition to ore prices, negative provisional price adjustments, weaker shipments due to seasonality and higher cash costs, with higher freight rates and less dilution of fixed costs.
Production
Vale’s operational performance was considered positive by analysts, who indicated comfort with the forecast for 2024. “This is the first quarter that we remember, in many years, in which Vale beats our model in general – it is just one quarter, but still an encouraging sign that the guidance may be conservative,” Citi said in a report.
Vale’s guidance points to production of between 310 million and 320 million tons of iron ore this year.
The bank, which had projected EBITDA of US$3.5 billion for the quarter, updated the figure to US$3.9 billion after the release of the operating results.
Itaú BBA cited sales – an increase of around 15%, in the annual comparison, in the group of ore fines and pellets – to increase its Ebitda forecast, from US$ 3.2 billion to US$ 3.6 billion.
But it says it expects weaker results, “impacted by sequentially weaker realized ore prices, lower volumes and higher costs.”
Nickel operations are also expected to record weaker results, with 33% price losses and a 17% drop in sales year-on-year. The result, which represents the sale of 33.1 thousand tons, is explained “by an accumulation of stocks in anticipation of planned maintenance during the second quarter”, cited BTG Pactual, referring to the two-week stoppage that is expected to take place at the mine from Voisey’s Bay, Canada.
The realized price of the product in the quarter was US$16,800.
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