Vale, one of the world’s largest iron ore miners, posted on Thursday a third-quarter net profit that landed above analysts’ estimates, while also cutting its full-year cost projections for copper and nickel.
Rio de Janeiro-headquartered Vale posted a $2.69 billion net profit for the July-September period, up 11% year-over-year and above the $2.10 billion expected by analysts polled by LSEG.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $4.4 billion in the period, a 21% increase, also beating estimates of $4.1 billion.
Vale released its sales and output data last week, with iron ore production reaching the highest since the fourth quarter of 2018 at 94.4 million metric tons.
“Overall, Vale posted strong results, driven by better realized prices in iron ore and byproducts, robust iron ore and copper sales volumes, and lower cost and expense,” Santander analysts led by Yuri Pereira wrote in a note to clients.
The analysts said they expected a positive share reaction on Friday. The results were released after the market closed on Thursday.
Third-quarter net revenue rose 9% to $10.4 billion, with Vale’s main iron ore business rising 6%, while its base metals unit – mostly copper and nickel – jumped 26%. Analysts had projected $10.3 billion of revenue for the miner.
Vale also cut its estimate for all-in copper costs this year to between $1,000 and $1,500 per ton, attributing the move to higher gold prices, as gold is a byproduct of Vale’s copper production. The previous projection was between $1,500 and $2,000 per ton.
The company also projected its all-in nickel costs between $13,000 and $14,000 per ton, down from a previous range of $14,000-$15,500 per ton, citing solid operational performance and strong metals prices.
(By Andre Romani and Roberto Samora; Editing by Brendan O’Boyle and Jamie Freed)
