Brazil's Vale Posts $1.68 Billion Profit--2nd Update

By Rogerio Jelmayer 

SAO PAULO--Brazilian mining giant Vale SA posted a net-profit increase of 17.3% in the second quarter, as lower debt-service costs helped to offset lower revenue in the period.

Vale, the world's largest iron-ore producer, on Thursday reported a second-quarter net profit of $1.68 billion, up from $1.43 billion a year ago.

The company's debt-service costs totaled $215 million in the second quarter, down from $983 million the previous year.

Vale's net revenue dropped 29.7% to $6.96 billion.

Its earnings before interest, taxes, depreciation and amortization, or Ebitda, tumbled 46.1% in the period to $2.2 billion.

Vale was able to reduce its cost and expenses in the period, to $4.93 billion, compared with $6 billion in the second quarter of 2014.

The company invested a total of $2.1 billion in its operations in the period, down from $2.47 billion one year ago.

In a separate statement, Vale said it concluded a previously announced sale of four Valemax ships--each capable of hauling 400,000 tons of iron ore--to China Merchants Energy Shipping Co. Ltd. for a total of $448 million. Vale said it expects to receive this amount upon the delivery of the ships expected to take place in September.

The sale is part of the company's disinvestment plan from certain noncore assets. In the second quarter, Vale sold four Valemax ships to China Ocean Shipping Co., or Cosco, for a total amount of $445 million.

Vale is the world's largest iron-ore producer, and China is the biggest consumer and Vale's top customer.

In a separate statement, Vale said it agreed to sell four Valemax ships--each capable of hauling 400,000 tons of iron ore--to China Merchants Energy Shipping Co. Ltd. for a total of $448 million. Vale said it expects to conclude the sale in the third quarter.

The sale is part of the company's disinvestment plan in certain noncore assets. In the second quarter, Vale sold four Valemax ships to China Ocean Shipping Co., or Cosco, for a total amount of $445 million.

Write to Rogerio Jelmayer at [e-mail]

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