Vale posts disappointing first quarter

Vale have posted some disappointing first quarter results, but company CEO Murilo Ferreira is as optimistic as ever.

Lower iron ore prices have caused a fall in earnings of 19 per cent, and sales of US$9.5 billion are about US1.5 billion lower than expectations.

Ferriera said that prices in the second half of the year will be much better than first.

“One thing is for sure, the price will not go below $110 on a sustainable basis,” he said.

“I think we have many time seen the price go below this level, but recovering very fast… because those are the level that many producers mainly in China will leave the market.”

Operational performance has been strong with Vale producing 71.1 million tonnes or iron ore, (which is the best performance seen since the first quarter of 2008), and record first quarter production figures of 1.8 million tonnes of coal and 67,500 tonnes of nickel.

The first quarter EBIDTA was US$4.058 billion, and gross revenue sales were US$9.682 billion with net income of US$2.515 billion, equivalent to 49c per share.

Capital expenditure was US$2.587 billion, with sustaining capex of US$753 million.

Vale is currently trading at US$13.19, up from US$13.09 after the quarterly report was released on April 30.

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