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MarketScreener Homepage  >  Equities  >  Bolsa de Valores de Sao Paulo  >  Vale S.A.    VALE3   BRVALEACNOR0

VALE S.A.

(VALE3)
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Vale Swings to 2Q Net Profit of $995 Million on Demand From China, Weaker Real

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07/30/2020 | 06:51am EDT

By Jeffrey T. Lewis

 

SÃO PAULO--Brazilian iron-ore mining giant Vale SA turned a net profit in the second quarter on strong demand from China and a weaker Brazilian currency.

The Rio de Janeiro-based company said Wednesday evening that it had net income of $995 million in the second quarter, compared with a loss of $133 million a year earlier and profit of $239 million in the first quarter. Vale posted a net loss in the second quarter of 2019 after it provisioned more than $1 billion related to the deadly accident at a tailings dam in January of that year.

Revenue in the second quarter of 2020 fell to $7.5 billion from $9.2 billion a year ago.

Adjusted earnings before interest, depreciation and amortization reached $3.4 billion in the second quarter, compared with adjusted Ebitda of $3.1 billion a year earlier. The company said it would have had an adjusted Ebitda of $3.6 billion in the second quarter of this year except for $130 million in expenses related to the dam accident and $85 million in donations during the coronavirus health crisis.

Iron prices have been higher than normal, partly because of a reduction in output from Vale following the dam disaster in the small town of Brumadinho, according to Chris LaFemina, an analyst at Jefferies. After that tragedy, which took the lives of 270 people when a tailings dam collapsed and a wave of mining waste wiped out a nearby Vale cantina, the company shut down production at other mines with similar dams.

Vale reported last week that iron-ore production rose 5.5% in the second quarter from a year earlier and maintained its output guidance for this year at 310 million metric tons to 330 million metric tons, adding that the figure is more likely to come in toward the lower end of that range.

Vale said it will resume making dividend payments to shareholders based on its first-half results, after halting them following the Brumadinho accident, and on the expectation that the worst of the coronavirus pandemic has passed. The health-care crisis had an impact of $112 million in the first half of this year, including the $85 million in donations and a $27 million increase in operational costs, Vale said.

 

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com


Stocks mentioned in the article
ChangeLast1st jan.
GOLD -0.20% 1901.174 Delayed Quote.25.56%
SILVER -0.36% 24.5975 Delayed Quote.38.53%
VALE S.A. 0.55% 63.45 End-of-day quote.19.04%
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Financials (USD)
Sales 2020 36 930 M - -
Net income 2020 8 686 M - -
Net Debt 2020 3 551 M - -
P/E ratio 2020 6,88x
Yield 2020 3,00%
Capitalization 57 943 M 57 842 M -
EV / Sales 2020 1,67x
EV / Sales 2021 1,54x
Nbr of Employees 79 646
Free-Float 76,8%
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Technical analysis trends VALE S.A.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 7
Average target price 15,00 $
Last Close Price 11,30 $
Spread / Highest target 63,3%
Spread / Average Target 32,8%
Spread / Lowest Target -3,48%
EPS Revisions
Managers
NameTitle
Eduardo Bartolomeo Chief Executive Officer
José Maurício Pereira Coelho Chairman
Luciano Siani Pires Executive Director-Finance & Investor Relations
Oscar Augusto de Camargo Filho Director
Marcel Juviniano Barros Director
Sector and Competitors
1st jan.Capitalization (M$)
VALE S.A.19.04%57 842
FORTESCUE METALS GROUP LIMITED56.41%36 597
KUMBA IRON ORE LIMITED23.49%10 188
NMDC LIMITED-34.20%3 519
FERREXPO PLC15.76%1 411
LABRADOR IRON ORE ROYALTY CORPORATION6.58%1 262