The mining company Vale published this Wednesday that its net profit fell 9% in the first quarter compared to the same period last year, with impacts mainly from lower prices realized in the sale of its main commodities.
The company, one of the largest iron ore producers in the world, recorded a net profit of US$1.7 billion in the quarter ended in March, while analysts surveyed by LSEG expected a profit of US$1.9 billion.
The main impact on Vale’s net profit when compared to the first quarter of last year came from lower prices for iron ore, nickel and copper, according to its financial statement.
The company’s adjusted earnings before interest, taxes, amortization and depreciation (Ebitda) fell 7% between January and March, to $3.44 billion, while analysts estimated $3.66 billion.
The negative impacts on the result, however, were partially offset by higher sales volumes of iron ore and copper, the company considered in its financial statement.
The company had published last week a 6.1% increase in its iron ore production between January and March compared to the same period in 2023, with the boost in the performance of its important S11D mine, in Pará, while sales in the period soared.
Vale’s iron ore production in the first three months of the year totaled 70.84 million tons, the best number for a first quarter since 2019, while sales increased 14.7%, to 63.83 million tons.
In the document published this Wednesday, Vale’s CEO Eduardo Bartolomeo highlighted that the company is making progress with growth projects, “which will help improve the quality and flexibility of our product portfolio”.
The average realized price of iron ore fines in the first quarter was 100.7 dollars per ton, compared to 108.6 dollars in the same period in 2023, with impacts from provisional price adjustments due to lower future values on the last day of the quarter than the average for the quarter, the company previously reported.
Net sales revenue in the first quarter was practically stable compared to a year earlier, at 8.5 billion dollars, against 8.64 billion dollars predicted by analysts.
Vale’s C1 cash cost (production cost from mine to port), excluding purchases from third parties, in the first quarter was slightly lower compared to a year earlier, reaching 23.5 dollars per ton.
Expanded net debt grew 14% in the first quarter compared to the same period in 2023, to 16.4 billion dollars, within Vale’s target, which remains in the range between 10 billion and 20 billion dollars.
Vale’s investments in the first quarter totaled 1.4 billion dollars, an increase of 23% compared to the same period last year.
Separately, Vale said it expects provisions of US$2.9 billion in 2024 related to the collapse of mining dams in Brumadinho and Mariana, both in Minas Gerais.
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