Vale reports surge in Q3 profit as iron ore prices rise

30 October 2017

Brazil’s Vale SA saw net income jump by nearly 300 percent in the third quarter, as prices of iron ore rose, the world’s largest iron ore producer said on Thursday.

In a securities filing, Vale said net income totaled $2.23 billion, 287 percent above the $575 million it posted during the same period last year. However, the figure was shy of an average consensus estimate of $2.439 billion.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) hit $4.192 billion, just below a consensus estimate of $4.384 billion compiled by Thomson Reuters.

Last week, the company announced record iron ore production in the July-September quarter which was helped by a ramp-up at its S11D mine.

On Thursday, the company said it had sold 76.4 million tons of iron ore in the third quarter, up from 74.2 million tons in the same quarter last year. The reference price of iron ore closed at $76.10 per tonne in the third quarter, up nearly 30 percent from a year earlier.

Vale also made strides in its plans to cut debt, posting net debt of $21.066 billion, down from $22.122 billion in the second quarter. The company has said it hopes to reach debt of $15-17 billion by the end of this year.

Revenue in the quarter reached $9.05 billion, just short of estimates for $9.09 billion, but well above the $6.726 billion posted a year earlier. Capital expenditure in the quarter was $863 million.

Source: Business Insider