Vale Reports $803 Million Q2 Profit, Surges 219% Year-on-Year
Vale, a leading mining company, recorded a profit of R$14.6 billion (US$803 million) in the second quarter of 2024, marking a 219% increase from the same period in 2023. The company's net revenue reached R$51.7 billion (US$2.84 billion), reflecting an 8.3% rise compared to the previous year. Compared to the first quarter, profit grew by 65%.
The improved results were partly due to the company's strategic divestments and reduced tax expenditures. Following the strong financial performance, Vale's board of directors approved the payment of R$8.9 billion (US$489.5 million) in interest on equity to shareholders, equating to R$2.0937 (US$0.1152) per share. Remuneration to B3 shareholders will occur on September 4, with a cut-off date of August 2. Shareholders with ADRs traded on the New York Stock Exchange will receive their payments on September 11.
Between April and June, Vale reported producing 80.6 million tons of iron ore, a 2.4% increase compared to the same period last year. Sales volumes rose by 7.3% to 79.792 million tons. Despite the year's overall poor performance of iron ore, which has declined by more than 25% due to China's real estate crisis affecting demand and increased supply in the maritime market, Vale continues to derive about 90% of its revenues from the steel sector.
Vale's shares saw a modest increase, closing up 0.28% in B3's regular trading session and rising 0.93% in after-market trading. Despite this, the stock is trading at a discount compared to other major mining companies due to specific issues Vale is currently facing.
The company is still managing the aftermath of the 2015 tailings dam disaster at Samarco, an iron ore joint venture with BHP Group. While Vale aimed to reach a final settlement with Brazilian authorities last month, negotiations are ongoing.
Additionally, Vale is navigating a leadership transition. CEO Eduardo Bartolomeo will remain in his position until December, while the search for his successor continues. The next CEO will be chosen from three shortlisted candidates presented by a consulting firm by the end of September.
