Vale posts net profit beat, cuts cost outlook for copper, nickel
Vale, one of the world's largest iron-ore miners, posted on Thursday a third-quarter net profit that landed above analysts' estimates, while also cutting its full-year cost projections for copper and nickel.
Rio de Janeiro-headquartered Vale posted a $2.69-billion net profit for the July-September period, up 11% year-over-year and above the $2.10-billion expected by analysts polled by LSEG.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $4.4-billion in the period, a 21% increase, also beating estimates of $4.1-billion.
Vale released its sales and output data last week, with iron ore production reaching the highest since the fourth quarter of 2018 at 94.4-million metric tons.
"Overall, Vale posted strong results, driven by better realized prices in iron-ore and byproducts, robust iron-ore and copper sales volumes, and lower cost and expense," Santander analysts led by Yuri Pereira wrote in a note to clients.
The analysts said they expected a positive share reaction on Friday. The results were released after the market closed on Thursday.
Third-quarter net revenue rose 9% to $10.4-billion, with Vale's main iron ore business rising 6%, while its base metals unit - mostly copper and nickel - jumped 26%. Analysts had projected $10.3-billion of revenue for the miner.
Vale also cut its estimate for all-in copper costs this year to between $1 000 and $1 500 per ton, attributing the move to higher gold prices, as gold is a byproduct of Vale's copper production. The previous projection was between $1 500 and $2 000 per ton.
The company also projected its all-in nickel costs between $13 000 and $14 000 per ton, down from a previous range of $14 000 to $15 500 per ton, citing solid operational performance and strong metals prices.
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