São Paulo – This Thursday (30th), the Brazilian mining company Vale has released its results for quarter three (Q3) 2014, including a net loss of US$ 1.437 billion. According to Vale’s balance sheet, sales increased by US$ 521 million in Q3, but results still suffered due to plummeting iron ore prices and the loss of value of Brazil’s currency the real against the US dollar.
“Net losses amounted to US$ 1.437 billion in Q3 as against a net profit of US$ 1.428 billion in Q2, mostly due to a US$ 2.683 billion non-cash impact from exchange rate fluctuations and debt- and derivative-related monetary losses stemming from the real’s depreciation in relation to the US dollar,” Vale’s balance sheet reads.
The company remarks that in Q3, the real lost 11.3% of its worth in relation to the dollar. By June 30th, the dollar was selling for R$ 2.20. By September 30th, the US currency was worth R$ 2.45. The benchmark price of iron ore in Q3 was US$ 90.21 per metric tonne. In Q2, the benchmark had been US$ 102.60. In Q3 2013, a metric tonne of iron ore sold for US$ 132.51. The commodity’s price is on the way down due to weakening demand.
Vale’s balance sheet also states that the company’s iron ore inventories grew by 9,300 tonnes in Q3 due to a temporary shutdown of Pará state’s Carajás Railway that caused less product to be transported, and to higher stock levels at the company’s Distribution Centre in Malaysia and pelletizing plant in Sohar, Oman.
Output increased at the Omani unit and at Tubarão plant, in Brazil’s Espírito Santo state. The company’s total Q3 output was 11,440 tonnes of iron ore pellets, up 15% from Q2 and 17.6% from Q3 2013.
Gross operating income from trade with Middle East countries stood at US$ 359 million in Q3, up 3.9% from Q3.
At the São Paulo Stock Exchange (Bovespa), Vale’s preferred stocks, whose holders have no voting rights, were selling for R$ 20.54 at 1:50 pm this Thursday. Depreciation stood at 4.29%.
*Translated by Gabriel Pomerancblum
