São Paulo – The Brazilian mining company Vale registered BRL 6.311 billion in profit (USD 1.787 billion at current exchange rates) in Q1 this year, in a reversal of the BRL 33.156 billion (USD 9.391 billion) losses it had incurred year-round in 2015. Q1 2016 financial statements released this Thursday (28th) show revenues at BRL 22.067 billion (USD 6.250 billion), down from BRL 22.681 billion (USD 6.424 billion) in Q4 2015.
The company imputed the profit to improved operating results, to the weakening dollar-to-real ratio, which makes its debt smaller, and to streamlined spending. In Q4 2015, Vale’s expenses had reached BRL 21.417 billion (USD 6.066 billion). In Q1 2016, it spent BRL 17.698 billion (USD 5.013 billion), a BRL 3.719 billion (USD 1.053 billion) expenditure reduction.
In a video, Vale’s CEO for Finance and Investor Relations Luciano Siani Pires also said profit rose as a result of higher productivity, cash operating income, reduced costs of iron ore sales to China, and higher iron ore prices.
The price of a ton of ore climbed from USD 45 per ton in Q4 2015 to USD 54.7 per ton in Q1 2016. Siani said the company had an “auspicious” first quarter and is “optimistic” going forward into quarter two, although he remarked that prices will still be recovering between April and June.
This Thursday, Vale shares were up on the São Paulo Stock Exchange (Bovespa). Preferred shares with no voting rights were going for BRL 16.12 (USD 4.56), up 5.57%. Common shares with voting rights were trading for BRL 20.40 (USD 5.77), up 4.94%, as of 12:28pm.
*Translated by Gabriel Pomerancblum
