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Brazil’s Vale Q3 profit misses estimate on impairment, lower iron ore prices

The logo of the Brazilian mining company Vale SA is seen in Brumadinho, Brazil January 29, 2019. REUTERS/Adriano Machado

RIO DE JANEIRO, Oct 28 (Reuters) – Brazilian miner Vale SA (VALE3.SA) reported on Thursday a third-quarter net profit of $3.9 billion, significantly below analysts’ forecasts of $6.2 billion, due to lower iron ore prices and an impairment at its coal business.

While Vale’s net income fell by almost half from the previous quarter, it surged 34% when compared with a year-ago period.

Vale, one of the world’s biggest iron ore miners, said its quarterly numbers were dented by iron ore prices that plunged 31% in the reported period, as well as a labor disruption at its Sudbury nickel mine in Canada that led to a hit in production.

The miner said it had an impairment charge in its coal business that totaled almost $2 billion, but did not give further details.

In the previous quarter, the company had disclosed a writedown on its coal assets resulting from a “lower long-term price assumption for metallurgical and thermal coal.”

Vale, one of the largest companies in Brazil, said on Thursday it would buy back 200 million shares, or about 4.1% of the firm’s outstanding shares.

“The new program reflects the confidence of the company’s management in Vale’s potential to create and share value in a consistent way.”

The company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $6.9 billion.

Reporting by Roberto Samora, Marta Nogueira and Marcelo Rochabrun; Editing by Sherry Jacob-Phillips

Our Standards: The Thomson Reuters Trust Principles.

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2021-10-28 20:29:00

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