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MarketScreener Homepage  >  Equities  >  Bolsa de valores de Sao Paulo  >  Vale S.A.    VALE3   BRVALEACNOR0

VALE S.A.

(VALE3)
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Vale Reports 4Q Net Loss of $1.56 Billion After Impairment Charges on Nickel, Coal Mines

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02/20/2020 | 06:34pm EDT

By Jeffrey T. Lewis

SAO PAULO--Brazilian iron-ore miner Vale SA posted a net loss in the fourth quarter after taking impairment charges on a nickel mine in New Caledonia and a coal mine in Mozambique.

Vale reported a fourth-quarter loss of $1.56 billion, compared with income of $3.79 billion a year earlier and income of $1.65 billion in the third quarter of 2019. Adjusted earnings before interest, taxes depreciation and amortization reached $3.54 billion, down from $4.47 billion a year earlier, and revenue rose to $9.96 billion from $9.81 billion in the fourth quarter of 2018.

The company said in November it was analyzing the performance of the nickel mine in the Pacific Ocean island of New Caledonia. Vale took an impairment charge of $2.5 billion on the operation in the fourth quarter, citing "challenging" issues during 2019, mostly related to production and processing.

The company wrote down another $1.7 billion in the quarter for the coal mine in Mozambique, and recorded $898 million in charges related to the tailings dam collapse in the small rural town of Brumadinho in January of last year.

Vale is still working to re-open some mines that were shut down after the dam failed, sending a wave of thick sludge over a nearby Vale lunch facility and offices and killing 270 people. Shortly after the tragedy, the company closed operations near similar dams around Brazil, while authorities ordered the closing of more of Vale's mines.

Some of those mines restarted last year, and Vale said it expects more to open this year. Vale produced 312.5 million metric tons of iron ore and pellets in 2019, squeaking past the upper end of its guidance of 307 million metric tons to 312 million tons, and expects output of 340 million tons to 355 million tons this year, even after reducing its guidance for the first quarter.

"They say they'll catch up in the following quarters," said Yuri Pereira, an analyst at XP Investimentos in Sao Paulo. "But even if the company can deliver the production, we think sales will come in a bit less" than the increase in output because Vale will also be replenishing stocks it ran down in the aftermath of the disaster in Brumadinho.

 

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRAZILIAN REAL (EUR/BRL) 0.13% 5.7413 Delayed Quote.27.13%
GOLD -0.32% 1586.53 Delayed Quote.3.99%
SILVER 0.79% 14.1019 Delayed Quote.-21.68%
VALE S.A. 3.47% 43.22 End-of-day quote.-18.91%
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Financials (USD)
Sales 2020 33 762 M
EBIT 2020 10 900 M
Net income 2020 6 611 M
Debt 2020 2 906 M
Yield 2020 2,12%
P/E ratio 2020 5,44x
P/E ratio 2021 4,85x
EV / Sales2020 1,34x
EV / Sales2021 1,23x
Capitalization 42 370 M
Chart VALE S.A.
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Vale S.A. Technical Analysis Chart | VALE3 | BRVALEACNOR0 | MarketScreener
Technical analysis trends VALE S.A.
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 8
Average target price 12,69  $
Last Close Price 8,26  $
Spread / Highest target 98,5%
Spread / Average Target 53,6%
Spread / Lowest Target -11,5%
EPS Revisions
Managers
NameTitle
Eduardo Bartolomeo Chief Executive Officer
José Maurício Pereira Coelho Chairman
Luciano Siani Pires Chief Financial Officer
Oscar Augusto de Camargo Filho Director
Marcel Juviniano Barros Director
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