Vale’s first quarter profit lower than expected as rains hurt iron ore output

Brazil’s Vale (NYSE:VALE), the world’s No.1 iron ore miner, logged Thursday net income for the first quarter that missed estimates, reflecting the impact of heavy rains that hampered output in the so-called northern system, which groups the Carajás, Serra Leste and S11D mines in northern Brazil, as well rising financial expenses.

The Rio de Janeiro-based company reported a net income of $2.5 billion, no less than a billion off an average consensus estimate of $3.325bn in profit.

The miner had already announced a production record in iron ore of 86.2 million tonnes for the January-March period, which it credited to the ramp-up of its massive S11D mine in Pará, and the Itabirito project, in Minas Gerais.

The figure however, was 6.7% lower than total iron ore output of 92.386 million tonnes in the prior three months, as seasonal rainfalls affected production.

Vale also said it had significantly reduced debt from $25 billion to $22.8 billion.

"The company is in a deleverage path and, in the next quarters, we will reach even better results", Luciano Siani Pires, the firm’s  Finance and Investor Relations Executive Director, said in a video posted on Vale’s website.

Despite the profit miss, the company is rewarding its shareholders with a $1.5 billion payment.

More to come…

 

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