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Vale's first-quarter net profit cut iron ore production this year to $239 million
Apr 29,2020 10:08CST
Vale's first-quarter net profit was $239 million, down from a net loss of $1.562 billion last quarter, up $1.801 billion from the previous quarter.
The content below was translated by Tencent automatically for reference.

SMM4, March 29: Vale recently released its first quarter financial results, which showed that in the first quarter of 2020, Vale's net profit was US $239 million, compared with a net loss of US $1.562 billion in the previous quarter, an increase of US $1.801 billion over the previous quarter.

The increase in net profit was mainly due to the recognition of a number of one-time charges in the previous quarter, such as impairment of nickel and coal assets ($4.202 billion) and related provisions for Bloomadiu ($898 million). These positive effects were partially offset by a decrease in adjusted EBITDA ($1.636 billion), an increase in financial costs ($1.445 billion) and a decrease in tax revenue due to a decrease in pre-tax losses ($764 million).

So far, Vale's operations have been limited by the new crown epidemic. The company has taken the following three necessary restrictions:

In the iron ore business, Vale suspended the operation of the Malaysian logistics center, which had no impact on production;

In terms of basic metals business, Vale has scaled back its mining operations at the (Voisey's Bay) mining area in Voith Bay, Canada, and has carried out repairs and maintenance for up to four months.

On the coal business, Vale decided to postpone the maintenance and reconstruction plan for the Mozambican coal concentrator.

Looking ahead, Vale has delayed the shutdown and maintenance of a number of plants, which will prevent factories from reaching optimal production levels, particularly at basic metals plants. Vale's production is also likely to be affected by increased absenteeism as a result of isolation measures, and the resumption of production will be delayed due to delays in the inspection, evaluation and approval process.

Taking into account the uncertainty and potential impact of the new crown epidemic on the company's operations, Vale has made changes to the guided production of its operations in 2020. The guided production of each business in 2020 is updated as follows: 310 million to 330 million tons of iron ore powder (originally 340 million to 355 million tons) and 35 million to 40 million tons of iron ore pellets (originally 44 million tons).

Vale iron ore production fell 18.20% in the first quarter from a year earlier to 59.6 million tons.

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