Quarterly results: Strong reduction in iron ore production costs leads Vale to generate substantial cash flow in 2Q15

About Vale

7/30/2015

Quarterly results: Strong reduction in iron ore production costs leads Vale to generate substantial cash flow in 2Q15

Quarterly results: Strong reduction in iron ore production costs leads Vale to generate substantial cash flow in 2Q15

Video
Watch: our CFO comments on 2Q15 results

After three quarters of our results being impacted by currency devaluations, Vale is presenting substantial progress in terms of cash flow generation for the second quarter of 2015, measured from an adjusted EBITDA of US$ 2.213 billion. This positive performance is due to an even stronger reduction in iron ore production costs, which have been falling significantly over the company’s last three results. The cost of production, known as the FOB price, has decreased from US$ 18.3 per ton on 1Q15 to US$ 15.8 on 2Q15 (excluding royalties). This is the lowest cost in Vale’s history.

“Without the currency devaluation, which impacts the value of our debt in dollars, Vale has posted a profit, with highly substantial results. This is very important news for the company,” explains Luciano Siani Pires, our Chief Financial Officer, in a video about Vale’s performance in 2Q15.

In terms of operational results, the main highlight is our strong performance in iron ore production, totaling 85.3 million tons. This is the highest production for a second quarter and the second highest in Vale’s history. “Vale is becoming increasingly more competitive and this will be the key issue in the coming quarters: growing results and widening margins, independent of the challenging situation in terms of prices,” says Siani. Watch the video in full and find out more about our results in the infographic below.

Get to know our results

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Quarterly results: Strong reduction in iron ore production costs leads Vale to generate substantial cash flow in 2Q15