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Vale books higher Q4, FY'17 net income YOY

Vale SA posted a net income of US$771 million in the fourth quarter of 2017, up from a year-ago net income of US$525 million, even after the effects of non-cash losses on monetary and exchange rate variation, higher impairments and other results on noncurrent assets.

Meanwhile, the company's full-year net income totaled US$5.51 billion, increasing from US$3.98 billion in 2016, on the back of the group's cash generation and net debt reduction efforts, it said Feb. 27.

Quarterly net operating revenue declined to US$9.16 billion from US$9.27 billion on a yearly basis, while annual net operating revenue rose to US$33.97 billion from US$27.49 in 2016.

Adjusted EBITDA for 2017 was up to US$15.34 billion, compared to US$11.97 billion a year earlier, driven mainly by higher realized prices and premiums. Meanwhile, adjusted EBITDA declined to US$4.11 billion in the fourth quarter from US$4.72 billion in the same quarter of 2016.

The solid operational performance and the conclusion of Vale's divestment program accelerated its net debt reduction, with the company trimming its net debt by US$6.90 billion to US$18.14 billion as of Dec. 31, 2017.

Free cash flow totaled US$8.60 billion in 2017, the highest level since 2011. Quarterly free cash flow increased to US$2.74 billion in the fourth quarter, mainly due to the positive impact of the reduction in working capital.

CapEx for 2017 declined to US$3.85 billion from US$5.48 billion in 2016, with the conclusion of its S11D mine and plant ramp-up, part of the Northern System operations. CapEx is expected to remain at these levels in the coming years.

The Brazilian mining giant recently reported that its iron ore production rose 1.1% year over year to 93.4 million tonnes in the fourth quarter and 5.1% to 366.5 million tonnes in the year, driven by record production at Northern System, due to the S11D mine and plant ramp-up.

The miner's board approved a dividend of 2.54 billion reais, payable on March 15. In December 2017, the board approved shareholder remuneration of 2.18 billion reais.

As of Feb. 27, US$1 was equivalent to 3.25 Brazilian reais.