Metals And Mining Giant Vale Misses Q3 Revenue Estimates On Weak Iron Ore Production

Vale S.A. VALE reported Q3 FY23 net operating revenue of $10.62 billion, missing the consensus of $10.937 billion.

Iron ore production fell 4% Y/Y to 86,238 thousand metric tons on lower run-of-mine production from the Paraopeba complex and lower output from Serra Norte. 

Nickel production fell 19% Y/Y owing to the planned continued transitioning of Voisey’s Bay to underground operations and additional maintenance at the Sudbury refinery.

Nevertheless, Pellet production was up 11% Y/Y to 9,175 thousand metric tons on higher production at S11D and increased pellet feed output from Brucutu with the commissioning of the Torto dam. 

Copper production rose 10% Y/Y to 81.6 thousand metric tons, led by the continued ramp-up of Salobo III, with the Salobo complex reaching the highest monthly production level in September 2023 since July 2019.

Proforma adjusted EBITDA from continued operations rose 12% Y/Y to $4.5 billion in Q3, with the Iron Solutions business EBITDA growing 18% y/y on higher iron ore realized prices and sales volumes.

EPS of $0.66 beats the consensus of $0.62. 

Free Cash Flow from Operations stood at $ 1.1 billion in Q3, representing an EBITDA to cash conversion of 25%.

Capital expenditures came in at $1.5 billion in Q3, higher $0.3 billion y/y aided by the continued progress of key projects such as Serra Sul 120 Mtpy, Capanema, Voisey’s Bay Mine Expansion, and Salobo III.

As of September 30th, 2023, net debt stood at $10.0 billion.

Also Read: Vale Divests 13% Interest In Base Metals Business For $3.4B

“We are advancing toward our long-term objectives, by starting loading tests at our 1st briquetting plant and signing two new agreements for the development of Mega Hubs. We have also completed the decharacterization of Dique 2, and B3/B4 dam’s emergency level was reduced to 1, in line with our new framework for dam management established in 2019,” said Eduardo Bartolomeo, Chief Executive Officer.

Price Action: VALE shares are trading lower by 0.23% at $13.00 premarket on the last check Friday.