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Vale’s Q2 net profit falls 24% but outdoes analyst forecasts

Brazilian miner Vale reported on Thursday a 24% decline in its second-quarter net profit from a year earlier to $2.12 billion, while still outperforming analyst expectations.

Analysts polled by LSEG had expected Vale, one of the world’s biggest iron ore producers, to post a $1.44 billion net profit for the quarter ended in June. The comparative base was high, given that Vale’s net profit a year ago was boosted by the divestment of its PT Vale Indonesia unit.

The miner’s revenue in the April to June period this year fell 11% compared to last year, but matched analyst expectations at $8.8 billion.

Revenue declined in Vale’s key iron ore segment compared to a year ago, hurt by smaller sales volumes and lower prices, but grew in both copper and nickel.

The average realized price for Vale’s iron ore fines was $85.1 per ton in the quarter, a drop of more than 13% from a year ago.

Those lower prices contributed to a 15% drop in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which totaled $3.39 billion.

At the same time, all-in costs decreased from last year in each category – 10% in iron ore, 60% in copper and 30% in nickel – due to efficiency measures and higher output.

Vale also said it spent $200 million less this quarter than a year before, keeping it on track to meet its 2025 guidance of $5.9 billion.

The company also announced it obtained the preliminary license for the Bacaba copper project, intended to extend the life of the Sossego complex. As well,Vale this month started commissioning a second furnace in Onça Puma, where it aims to start nickel production in the last quarter of the year.

(By Andre Romani, Marta Nogeuira and Daina Beth Solomon; Editing by Natalia Siniawski, Brendan O’Boyle and Cynthia Osterman)

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