SHANGHAI, Feb. 24 (SMM) - Vale S.A. (Vale) delivered a sound operational performance in 2016, according to its statement in an e-mail to SMM.
The company reported several production records in 2016, namely: (i) iron ore production of 348.8 million tonne (including third party purchases and excluding Samarco’s attributable production); (ii) Carajás iron ore production of 148.1 million tonne; (iii) nickel production of 311,000 tonne; (iv) copper production of 453,100 tonne; (v) cobalt production of 5,799 tonne; (vi) contained gold as a by-product in the copper and nickel concentrates of 483,000 oz and (vii) Moatize coal production of 5.5 million tonne.
Net operating revenues in 2016 were US$ 29.363 billion, 14.7% higher than the US$ 25.609 billion registered in 2015. The increase in sales revenues was mainly due to higher realized prices of iron ore fines and pellets (US$ 2.966 billion), and higher volumes of iron ore fines and pellets (US$ 715 million) and base metals (US$ 407 million) partially offset by lower base metals prices (US$ 431 million).
Costs and expenses decreased by US$ 1.841 billion to US$ 17.379 billion in 2016, mainly due to: (i) the impact of exchange rate variations in COGS and SG&A (US$ 399 million), (ii) cost savings initiatives (US$ 1.623 billion) and (iii) a reduction in expenses (US$ 387 million). These reductions were partially offset by higher sales volumes (US$ 942 million).
The main highlights of Vale’s performance by business segment were:
EBITDA from the Ferrous Minerals business segment increased 78% in 2016 vs. 2015, mainly driven by higher prices and gains in competitiveness
Quarterly EBITDA from the Ferrous Minerals business segment increased 65% in 4Q16 vs. 3Q16, mainly driven by higher realized prices and higher sales volumes
EBITDA from the Base Metals business segment increased significantly in 2016 as a result of lower costs and expenses despite lower prices
Quarterly EBITDA from the Base Metals business segment increased with higher nickel and copper prices
EBITDA from Coal improved significantly in 2016, with the EBITDA of coal shipped through the Nacala port reaching US$ 110 million
Quarterly EBITDA from Coal improved significantly to US$ 156 million in 4Q16, as a result of higher coal prices.