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In This List

Vale swings to Q2'19 loss YOY on US$2.14B in write-downs for Samarco, Feijao

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Vale swings to Q2'19 loss YOY on US$2.14B in write-downs for Samarco, Feijao

Vale SA swung to a second-quarter loss of US$133 million, or 3 cents per share, from a profit of US$76 million, or 1 cent per share, in the same quarter last year.

The loss was attributed to US$2.14 billion in write-downs related to the tailings dam burst at the Samarco mine in 2015 and a similar incident at the Feijao mine this January, it said July 31. Vale took US$1.5 billion in write-downs for the impact of the Feijao dam burst, US$257 million for the decommissioning of Samarco's Germano tailings dam, and US$383 million for the Renova Foundation, which was created to distribute funds to the victims of the Samarco disaster.

The company's revenue, meanwhile, grew 6.6% to US$9.19 billion in the quarter, from US$8.62 billion, on the back of higher sales volumes.

Adjusted EBITDA for the period amounted to US$3.10 billion, down from US$3.88 billion. On a segment basis, adjusted EBITDA for the Brazilian miner's ferrous minerals business was US$4.22 billion, with the base metals division amounting to US$465 million, while its coal division slumped to a loss of US$106 million, from EBITDA of US$45 million.

Iron ore output during the period fell 33.8% to 64.1 million tonnes, resulting from the Feijao dam disaster, as well as inclement weather in April and May disrupting its Northern System operations, which include the Carajas and S11D mines.

Capital expenditure grew to US$730 million, from year-ago capex of US$705 million. About US$600 million in capex was allocated to its operations maintenance, with US$67 million applied to replacement projects at Voisey's Bay nickel mine and Northern System's Gelado project, and US$71 million for its tailings dams and waste dumps.