Vale posts $3.8bn loss on nickel impairment; analysts welcome core profit
SAO PAULO/RIO DE JANEIRO - Miner Vale on Thursday reported that its fourth-quarter net loss widened year-on-year, citing an impairment of nickel assets in Canada, yet analysts welcomed a core profit above expectations, projecting a positive share reaction.
Rio de Janeiro-headquartered Vale, one of the world's largest iron-ore producers, posted a $3.8-billion net loss for the October-to-December quarter, compared to a $694-million loss in the same period of 2024. Analysts polled by LSEG had expected a $2.7-billion profit.
Vale said it logged a $3.5-billion impairment on Vale Base Metals' nickel assets in Canada, "triggered by a downward revision in long-term nickel price assumptions based on market estimates".
It also cited a $2.8-billion impact from a write-off of deferred tax assets from subsidiaries, while it increased provisions from Samarco, a joint venture with BHP BHP.AX, by $449-million due to updates of a class action lawsuit in Britain related to the deadly 2015 Fundao tailings dam collapse.
Despite the billion-dollar loss, core earnings - or adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) - expanded 21% to $4.6-billion. Excluding non-recurring items and other effects, Vale's EDITDA reached $4.8 billion. Analysts had projected it to hit $4.6-billion.
Analysts at Itau BBA and Santander stressed the $4.8-billion EBITDA above their own, as well as the market's, expectations - and projected a positive share reaction on Friday.
Vale said its operational results were boosted by higher prices of copper and its by-products, as well as higher volumes sold of iron ore and copper. The miner noted, however, that the effects were partially offset by a stronger Brazilian real.
The company, which last month said its 2025 iron ore production hit the highest annual level since 2018, reported net revenue for the quarter of $11.1-billion, rising 9% and coming nearly in line with the $11-billion expected by analysts.
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