In an event with the market, IR director says that Vale’s goal is to reduce net debt to US$ 10 billion before the end of the year

About Vale

1/18/2018

In an event with the market, IR director says that Vale’s goal is to reduce net debt to US$ 10 billion before the end of the year

Invest in projects that generate returns, increase dividends to shareholders and decrease indebtedness. These are Vale’s goals for 2018, according to Investor Relations director André Figueiredo. The statements were made at a meeting with investors, held by the Association of Capital Markets Analysts and Investment Professionals (Apimec) of São Paulo, on Wednesday, January 17.

At the event, Figueiredo also commented on Vale’s current situation, which after a series of internal changes, is in its best form since it was created. With the director’s positive statements, Vale’s stock posted gains over Wednesday.

Today, Vale is more competitive than the Australians, despite the distance between Brazil and China”, he commented.

Check out some of the highlights of the event:

Debt

Vale’s goal is to reduce its net debt to US$ 10 billion by the end of this year. As part of the debt payment, US$ 3.6 billion will be used from Project Finance(http://www.vale.com/brasil/PT/investors/information-market/calendar-ir-news/Paginas/vale-anuncia-a-assinatura-do-project-finance-para-o-corredor-logistico-de-nacala.aspx),in Mozambique, and the sale of fertilizer assets. In addition, according to the executive, Vale will generate substantial cash flows over the next three years, which will also contribute to the goal. In a scenario where the iron ore price is between US$ 55 and US$ 65 per ton and the nickel price is between US$ 10 thousand and US$ 14 thousand per ton, the cumulative cash flow from 2018 to 2020 could range between US$ 13 and US$ 25 billion.

Sale of shares

Figueiredo recalled the talk of Previ’s chairman, who is also chairman of Vale’s Board of Directors, Gueitiro Matsuo Genso, who in December at Vale’s migration ceremony to the B3 Novo Mercado segment affirmed full harmony among the four shareholders from Valepar - Previ, Mitsui, Bradesco and BNDES - and that there will be no unbridled exit from Vale after the end of the lock-up, which runs until the end of next month.

Goals

Vale’s main purpose is not volume, but return. Therefore, an iron ore production of 400 million tons will only be reached if this helps Vale to obtain the best margin.

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In an event with the market, IR director says that Vale’s goal is to reduce net debt to US$ 10 billion before the end of the year