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Vale jumps despite wider Q3 loss, as weak Brazil currency cuts both ways
Vale (VALE +4.4%) is jumping despite reporting a $2.12B Q3 loss, 47% wider than a year ago, on revenue that fell 28% Y/Y to $6.5B largely due to lower prices for iron ore and other commodities.Vale also was hurt by the Brazilian real, which weakened by 28% vs. the dollar over the quarter and increased the local value of Vale's foreign currency debts, but CFO Luciano Siani says Vale's total debt in dollars actually decreased over the period.The weaker real also sent Vale's costs, particularly in iron ore, sharply lower, reducing Q3 cash costs to $12.70/metric ton, which the company says is the lowest in the industry; including expenses such as freight and royalties, Vale says it delivered iron ore to China, its main market, at $34.20/ton during Q3 vs. $58.50 a year earlier.Vale says it expects steel demand to recover globally next year, thanks to demand from developed economies and China.Vale also says its new S11D iron ore project in the Amazon, currently the industry's largest project, is 75% finished, and an expansion of the related railway and port is 50% complete; S11D could enable Vale's average production costs to fall to $10/metric ton, says iron ore head Peter Poppinga.
|11:45 AM
Vale (VALE +4.4%) is jumping despite reporting a $2.12B Q3 loss, 47% wider than a year ago, on revenue that fell 28% Y/Y to $6.5B largely due to lower prices for iron ore and other commodities.Vale also was hurt by the Brazilian real, which weakened by 28% vs. the dollar over the quarter and increased the local value of Vale's foreign currency debts, but CFO Luciano Siani says Vale's total debt in dollars actually decreased over the period.The weaker real also sent Vale's costs, particularly in iron ore, sharply lower, reducing Q3 cash costs to $12.70/metric ton, which the company says is the lowest in the industry; including expenses such as freight and royalties, Vale says it delivered iron ore to China, its main market, at $34.20/ton during Q3 vs. $58.50 a year earlier.Vale says it expects steel demand to recover globally next year, thanks to demand from developed economies and China.Vale also says its new S11D iron ore project in the Amazon, currently the industry's largest project, is 75% finished, and an expansion of the related railway and port is 50% complete; S11D could enable Vale's average production costs to fall to $10/metric ton, says iron ore head Peter Poppinga.
|11:45 AM
