Business

Financial Results 1Q21

Vale announced this Monday, April 26th, its financial result for the first trimester of 2021. In 1Q21 we advanced in de-risking Vale, despite the aggravation of COVID-19 situation in some regions where we operate.

I am confident that our positive financial results reflect our consistency in delivering our promises in de-risking Vale. In the first three months of the year the Global Settlement of Brumadinho became effective in a process conducted with transparency, legitimacy and legal certainty. In the same period, we concluded the sale of our operations of Vale New Caledonia, an important milestone in divesting non-core assets and shortly thereafter our Board of Director approved a share buyback program demonstrating the management confidence in Vale’s potential to consistently create and share value.

Eduardo Bartolomeo, Chief Executive Officer

Reparation of Brumadinho

The Global Settlement, entered into in February and certified by court decision in April, ensures the continuity of initiatives that are being implemented since 2019 and provides for a concrete plan to repair the socio-environmental and socio-economic collective damage resulting from the B-1 dam rupture. In addition to the direct payments to be made by Vale, the company also has a portfolio of projects to be executed, part of those already defined and under implementation and other that will result from demands by the communities.

Donations for fighting against COVID-19

Following the deterioration worsening of the COVID-19 outbreak in Brazil, Vale and a pool of companies have joined forces to donate 3.4 million critical medicines for intubation. Sedatives, muscle neuroblocks and opioid analgesics, imported from China, are being delivered to the Brazilian Federal Government for later distribution through the public healthcare system (SUS). Since 2Q20 Vale has donated US$ 111 million to the fight against COVID-19 in the regions where it operates.

First Integrated Report

Vale published its first Integrated Report, containing results attained in material topics selected after consultation with our main stakeholders. Adherence to the Integrated Reporting Council (IIRC) standard in addition to the Global Reporting Initiative (GRI) standard - adopted since 2007 by the company for its Sustainability report - aims to make Vale's ESG connection to its business model clearer.

Improvements in dams’ safety

After the conclusion of works for stability improvements in 1Q21, the dams Itabiruçu, Capim Branco, Menezes II and Taquaras, all of them in the state of Minas Gerais, had their Emergence Level 1 protocol removed and their positive Stability Condition Declarations issued. We are working on safety improvements for the 29 tailings storage facilities which remain at Emergency Levels and expect to gradually achieve satisfactory safety conditions for all of them by the end of 2025.

Imagem Relatório Financeiro

Results

In 1Q21, Vale reported a proforma adjusted EBITDA of US$ 8.467 billion, a record for a first quarter, with seasonally lower volumes partially offset by higher commodity prices.

Performance in 1Q21 was mainly pushed by Ferrous Minerals EBITDA (US$ 7.811 billion), US$ 989 million lower than 4Q20; by Base Metals EBITDA (US$ 1.011 billion), a decrease of US$ 160 million from 4Q20; by Coal EBITDA (negative US$ 159 million), up by US$ 132 million and by Others EBITDA, improved by US$ 381 million.

Net income was US$ 5.546 billion in 1Q21, US$ 4.807 billion higher than 4Q20, primarily due to Brumadinho expenses, Nickel and Coal Businesses asset impairment charges, both in 4Q20, and higher financial results, despite the impact of the 9.6% BRL exchange rate devaluation on the mark-to-market of our hedge positions.