Vale Posts Q3 Net Profit of $2.41 Billion, Beating Estimates Despite Lower Iron Ore Prices
Brazilian mining giant Vale reported a third-quarter net profit of $2.41 billion, beating analysts' expectations, despite a 15% drop from a year earlier. The decline was largely driven by lower iron ore prices and additional provisions related to the 2015 Mariana dam disaster.
The $2.41 billion profit exceeded analysts' estimates of $1.65 billion, according to LSEG, while revenue came in at $9.55 billion—slightly above market expectations of $9.44 billion. Despite a 10% decline in year-on-year revenue, Vale still posted the highest iron ore production for a quarter since 2018, though realized prices for iron ore fines dropped by 14%, which weighed on overall profitability.
Core profit, measured by adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), fell by 18% year-on-year to $3.62 billion, closely aligning with analysts' estimates of $3.61 billion. Vale also recorded an additional $956 million provision for the Samarco dam collapse in 2015, which occurred at an iron ore mine owned by Samarco, a joint venture between Vale and BHP. This comes ahead of a final compensation agreement expected to be signed on Friday with Brazilian authorities, which would see the three miners collectively pay up to 170 billion reais ($30 billion), with 100 billion reais allocated over 20 years directly to public authorities.
New CEO Gustavo Pimenta, who took the helm earlier this month after previously serving as Vale's chief financial officer, emphasized a shift towards improving the quality of Vale's iron ore portfolio while maintaining a focus on client needs. He highlighted efforts to accelerate the company's offering of high-quality iron ore products, while also seeking growth in its base metals unit, particularly copper.
Additionally, Vale raised its all-in cost guidance for copper for the year in a separate filing on Thursday evening, hinting at increasing costs in its growing base metals division.
