Vale recorded a profit of R$ 23 billion in the first quarter of 2022. The result is 27.4% lower than in the same period in 2021, the year in which the mining company recorded the highest profit in the history of Brazilian public companies, of R$ 121 billion.
According to the mining company, the performance in the first three months of 2022 was negatively impacted by the drop in production due to heavy rains in Minas Gerais during the summer and delays in environmental licensing, a scenario partially offset by better premiums in the sale of iron ore.
“Despite the challenging quarter in our operations, we are on track to meet our commitments for 2022,” said Vale’s president, Eduardo Bartolomeo, in a statement released this Wednesday (27).
The production of iron ore, Vale’s main product, fell 7% compared to the first quarter of 2021, to 63.9 million tons. But the premium for the highest quality of ore reached US$ 9.1 (about R$ 45, at the current price) per ton, almost double that recorded at the end of 2021.
The value is also higher than the US$ 8.5 per ton seen in the first quarter of 2021. According to the company, the high premiums reflect a tighter scenario of global iron ore supply.
In the first quarter of 2022, Vale had revenue of R$ 56.7 billion, a decrease of 17.6% compared to the same period of the previous year. Ebitda, an indicator that measures cash generation, dropped 29.9% to R$32.6 billion.
In the balance sheet released on Wednesday, the company says that its operations have not suffered significant impacts from the war in Ukraine, although they have benefited from a rise in the price of ore at the beginning of the conflict.
But it assesses that the war still brings risks such as “interruption of international trade flows, extreme volatility of market prices, with an impact on the energy sector, industrial and agricultural supply chains, transport and regulatory and contractual uncertainty with the increase in geopolitical tensions”. “.
Vale closed the quarter with a gross debt of US$ 14 billion (R$ 70 billion), US$ 3 billion (R$ 15 billion) higher than at the end of the previous quarter. The increase, according to the company, reflects the payment of US$ 3.5 billion in dividends related to the result of the second half of 2021.
During the past year, the company had already distributed US$ 7.4 billion (R$ 37 billion) to its shareholders in 2021, as remuneration for the performance of the first half.
In the first three months of 2022, Vale spent BRL 832 million on actions related to repairing the damage caused by the rupture of the Brumadinho (MG) dam, which left 277 dead in January 2019.
In the balance sheet, the company says that, after judicial authorization, it started detailing the implementation of nine socio-economic repair projects in municipalities in the region served, selected based on results of popular consultation.
When announcing the result, the mining company announced the approval of a new share buyback program, with the objective of acquiring up to 500 million shares, equivalent to 10% of the shares currently in circulation.
“Guided by our discipline in capital allocation, we consider the buyback of our shares to be one of the best investments available to the company,” the company said in a statement.
A previously announced buyback program with a cap of acquiring 200 million, is nearing completion. With the reduction in the volume of papers, the company expects to raise the unit price of each share.
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