Vale Posts Net Loss; Sets Aside More Funds for Dam Collapse
2019年8月1日 - 09:12AM
Dow Jones News
By Jeffrey T. Lewis
SÃO PAULO -- Brazilian mining giant Vale SA posted a net loss in
the second quarter after it set aside additional funds -- more than
$1 billion -- related to a deadly accident at a tailings dam that
claimed 270 lives in January.
Vale's said it lost $133 million in the quarter, compared with
net income of $76 million in the same period a year earlier. Net
operating revenue rose to $9.2 billion, from $8.6 billion in the
year-earlier period. The company reported adjusted earnings before
interest, taxes, depreciation and amortization of $3.1 billion,
from $3.9 billion a year earlier.
Vale said it provisioned an additional $1.37 billion in the
quarter related to the dam accident in the small, rural town of
Brumadinho in January -- after provisioning $4.5 billion in the
first quarter. Vale said it also incurred $158 million in
additional expenses over the tragedy in the second quarter.
Vale's revenue rose from a year earlier thanks to an increase in
the price of iron ore, which partly stemmed from the dam's
collapse.
After the disaster, the mining giant chose to shut down several
of mines near similar tailings dams and was ordered by courts to
shut down other mines. As a result, Vale said it expects sales in a
range of 307 million metric tons to 332 million tons for this year,
after providing a production guidance of about 400 million tons for
2019 before the dam accident.
The decline in production contributed to a 52% increase in the
price of iron compared with a year earlier, according to Chris
Terry, an analyst at Deutsche Bank in New York.
Other big producers experienced some production problems as
well, while stronger-than-expected demand for iron ore from Chinese
steel makers also supported prices during the quarter, Mr. Terry
added.
"Demand hasn't paused to wait for supply to come back online,"
he said.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
(END) Dow Jones Newswires
July 31, 2019 19:57 ET (23:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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