Vale’s profit drops 18.5% to R$23.3 billion

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Vale earned R$23.3 billion in the third quarter of 2022, down 18.5% from the same period last year. The decline, says the company, reflects the lower prices of iron ore, its main product.

In 2022, with an accumulated profit of BRL 76.6 billion, the mining company has already announced the payment of BRL 14.2 billion to its shareholders. In 2021, Vale had the highest profit ever recorded by a Brazilian company, at R$121 billion.

In the third quarter of 2022, Vale sold its iron ore production at an average price of US$92.6 per ton, down 27% from the same period last year. Ore sales increased by 3.5% to 69 million tonnes.

The price drop dropped Vale’s revenue by 19%, to R$52.1 billion. Ebitda, an indicator that measures a company’s cash generation, dropped 25.2% to R$19.3 billion.

In a comment on the balance sheet, the company’s president, Eduardo Bartolomeo, said that the performance was solid in all areas of activity. “As the world faces mounting inflationary pressures, we remain focused on cost discipline and improving operational reliability,” he said.

The company’s gross debt fell 3.1% to $12.2 billion, including the cost of leases. The fall, according to the company, was caused by the amortization of bank loans.

Vale also reported that it completed 40% of its program to de-characterize dams similar to the one that failed in Brumadinho (MG), leaving 272 dead in January 2019. Since 2019, 12 structures have been eliminated, five of them in 2022.

The company did not announce dividends for the quarter’s results. It has preferred to direct resources towards the repurchase of shares, with the objective of valuing the shares. So far, it has bought 126 million shares, a quarter of the target set.

At the beginning of the month, Vale was the target of an attack by the Cosan group, controlled by businessman Rubens Ometto, who sees in the mining company an opportunity to diversify its operations, currently in the fuel, gas, logistics and renewable energy sectors.

Cosan announced the purchase of 4.9% of Vale’s shares, which would place it in fifth position among the mining company’s largest shareholders, behind Previ (8.61%), Capital Group (6.69%), BlackRock ( 6.33%) and Mitsui (5.99%).

The operation will be paid with dividends from the Raízen fuel and Compass gas companies. If you consider that you will have a voice in the management of the company, Cosan can increase this share to 6.5%.

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