Vale's Profit Falls Amid Lower Volumes -- Update
26 April 2018 - 11:21AM
Dow Jones News
SÃO PAULO--Brazilian mining giant Vale SA reported a 36% drop in
net profit in the first quarter from a year earlier, putting the
decline down mainly to currency losses as well as the lower price
of iron ore.
Vale said its first-quarter net profit fell to $1.59 billion in
the first three months of the year from $2.49 billion a year
earlier. Cash flow as measured by earnings before interest, taxes,
depreciation and amortization, or Ebitda, fell 8% in the first
quarter from a year earlier to $3.97 billion.
Financial losses related to fluctuations in Brazil's currency
and interest rates totalled about $185 million in the first
quarter, compared to gains of $229 million in the same quarter last
year. Vale also said it sold its core iron ore product at a lower
average price of $66.4 a tonne in the first three months of 2018,
compared to $75.78 in the first quarter of last year.
Chief Executive Fabio Schvartsman said in a filing Wednesday
that the company was still well-positioned to generate shareholder
value, saying he planned to make Vale a "more predictable
company."
"Thus, in any given price scenario, the market will be able to
easily forecast Vale's performance," Mr. Schvartsman said.
Net operating revenues rose 1% to $8.60 billion in the first
quarter from a year earlier.
In its filing Wednesday, Vale also reported its lowest level of
investment for any first quarter since 2005. The Rio de
Janeiro-based company invested $890 million in the first quarter,
compared to $1.11 billion a year earlier.
After the company opened its vast S11D mining project in the
middle of Brazil's Amazon rain forest at the end of 2016, it has
said that its near-term strategy is to rein in investment and focus
on boosting investors' returns.
Write to Samantha Pearson at samantha.pearson@wsj.com
(END) Dow Jones Newswires
April 25, 2018 21:06 ET (01:06 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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