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Highlights
- Vale SA has reported a third-quarter net profit of US$3.9 billion.
- The miner’s net income tumbled nearly 50% relative to the previous quarter.
- Vale has also announced that it would buy back nearly 4.1% shares or 200 million outstanding shares of the company.
Brazilian mining giant Vale SA has reported a third-quarter net profit of US$3.9 billion, significantly lower than the forecast of analysts on the back of impairment in the company's coal business and lower iron ore prices. However, the income of the quarter is significantly higher than the Q3 2020 income of US$2.9 billion.
The miner's net income tumbled nearly 50% relative to the previous quarter while comparing it with the previous corresponding period, it surged nearly 34%.
Vale is one of the leading iron ore miners of the world and its quarterly results were primarily affected by a plunge in iron ore prices. The prices of iron ore plunged nearly 31% during the period. Additionally, the shortage of laborers at Canada's Sudbury nickel mine has also hampered the mine’s production.
Vale’s coal impairment
The miner also stated that it has an impairment charge of US$2 billion in its coal business, however, the company didn’t provide any further details.
Coal prices | Source: © Natalibabinska | Megapixl.com
In the previous quarter, the miner had disclosed a writedown on its coal assets resulting from a lower term price assumption for thermal and metallurgical coal.
Apart from this, Vale has also announced that it would buy back nearly 4.1% shares or 200 million outstanding shares of the company.
The company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) landed at US$6.9 billion during the period.
Bottom Line
Brazil’s iron ore miner has reported its third-quarter earning with lower-than-expected earnings to impairment of its coal business and fall in iron ore prices.
