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Vale iron ore production and profit increased m-o-m in Q3

Published: 29 Oct 2009 01:24:20 PST

October 29 MetalBiz--The world' largest iron ore supplier-Vale announced on October 29 that the company' s net profit continued to dip year on year in Q3 due to the falling of iron ore production and demand as well as the decreasing nickel price.

The net profit of Vale dropped from U.S.$4.82bln to U.S.$1.68bln in Q3, down 65% year on year, the EBITDA (earnings before interest, taxed, depreciation and amortization) fell to U.S.$3.01bln from U.S.46.37bln and the earnings of per share slipped from U.S.$94 to U.S.$31, down 67%. Benefited from the m-o-m increase of iron ore output, the iron ore price jumped 10% and the company' s profit in Q3 was better than Q2, an 11.3% growth compared with U.S.$790mln in Q2.

In Q3, the company's iron ore production fell to 64.33mln tons from 85.90mln tons in the same period last year, but higher than 58mln tons in Q2, nickel output sank 50% to 33,000 tons from 72,000 tons and the copper production slipped to 31,000 tons from 80,000 tons, a decrease of 66.6% around.

With the reviving of global economy, the iron ore demand tended to rally in Q3 and the price increased about 10%. The average price in Q3 was U.S. $57.23 per ton, while it was U.S. $47.28 per ton minimum in Q2.

In November last year, the company began to reduce production. The reduction was about 30mln tons per year, exceeded its opponents-Rio Tinto and BHP Billiton. With the improvement of market demand and confidence, the company expects to work with full capacity in 2010. Vale's investment reached U.S. $12.9bln in 2010, which was mostly used in iron ore production, research and development as well as the planned expansion projects. It is estimated that the iron ore output will jump to 450mln tons in 2014.

According to the report of BHP Billiton recently, the company' s iron ore production inclined 1% year on year to 30.10mln tons in Q3, a growth of 11% month on month. Rio Tinto's iron ore output amounted to 47.50mln tons in Q3, up 12% year on year and 5% month on month.