Quarterly results: Vale records profit and excellent cash generation performance in first quarter of 2016

About Vale

4/28/2016

Quarterly results: Vale records profit and excellent cash generation performance in first quarter of 2016

Quarterly results: Vale records profit and excellent cash generation performance in first quarter of 2016

Today (Thursday, April 28), Vale announced its financial results for the first quarter of 2016. The company moved back into the black, posting earnings of US$ 1.77 billion, lifted by the appreciation of the Brazilian real against the US dollar. Another highlight was cash generation, which amounted to US$ 2 billion, up 44% from 4Q15. “The first quarter was promising. In the most crucial area – cash generation – we performed excellently. Despite being a traditionally weaker quarter in terms of sales, we achieved these results through production records,” says Vale’s CFO and investor relations executive director, Luciano Siani Pires, in the video to the side, in which he comments on the results.

In terms of operational performance, we have achieved new production records for a first quarter in iron ore, pellets, nickel and copper. Our record production of iron ore in 1T16 indicates an annualized production in line with what we announced for the year 2016, around 340 million to 350 million tons. We continue keeping the focus on maximizing our margins, taking advantage of the greater flexibility of our iron ore supply chain, which has 22 mines, 11 pelletizing plants, 5 railways, 4 ports and 2 distribution centres, among other things, so that we can adapt our products to any market condition. Despite the rise in iron ore prices, we are aware of continuing market volatility. “Vale enters this second quarter, which has also been a quarter of price recovery, with considerable optimism, but we won’t let down our guard,” Siani says.

Our production costs continue to fall. The cost of iron ore delivered in China declined from US$ 31 in the previous quarter to US$ 22, and our expenses as a whole fell roughly 20% from the previous quarter. “We will continue to work to improve our competitiveness, complete our main project, S11D, and therefore pay down our debt and resume paying generous dividends to our shareholders. This is our goal,” the director adds.

Watch the full video and find out more about our results in the infographic below.


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Quarterly results: Vale records profit and excellent cash generation performance in first quarter of 2016