Vale (VALE3) delivers bad results, and shares fall sharply; see analyst opinion – Money Times

OK
For market analysts, the worse-than-expected results are explained by lower revenue (Image: REUTERS/Pilar Olivares)

The results of OK (VALE3) disappointed the market, with proforma adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) of $5.5 billion coming 11% below consensus expectations.

Net sales revenue also did not meet expectations, with the amount totaling US$ 11.15 billion in the second quarter of the year, a decrease of 32.4% in relation to the result of a year ago.

This Friday (29), around 12:10 pm, the company’s shares were traded down 2.5%, at R$ 68.94. At the lowest of the day so far, the price of the paper reached R$ 68.03, a decrease of 3.7%.

What didn’t you like?

For market analysts, the worse-than-expected results are explained by lower revenue, impacted by both a lower realized price and lower volumes sold.

Furthermore, the biggest freight costs and C1 pressured the mining company’s numbers, even in an environment of healthy sales volume for iron ore and high iron ore prices. nickelhighlights the XP Investimentos.

“It should be noted that the breakeven of Vale fines (with maintenance investment) reached US$ 65/ton (which used to be the long-term price assumed by most analysts in their models), demonstrating how much this industry suffered from cost inflation”, says André Vidal, in a report updated this Thursday.

Box still robust

Not everything was bad in Vale’s results. XP and other institutions reinforce that the cash flow of the company was better in the second quarter than in the first quarter, totaling US$ 2.3 billion (vs. US$ 1.2 billion).

The growth came from the positive impact of working capital, in addition to lower tax payments, mentions the Itaú BBA.

For the BTG Pactual (BPAC11), Vale generated “decent” cash figures in the quarter, with 14% of yield annualized. The bank also highlights that the company did not disclose additional provisions, despite fears related to Samarco.

In the evaluation of Great Investmentsearnings above expectations and shareholder remuneration still on the agenda were “important events” to offset much of the negative result.

Vale reported net income of US$ 6.2 billion in the second quarter of the year, down 17.7% compared to the same period in 2021. Net income from continuing operations attributable to shareholders reached US$ 4.09 billion.

Sales volumes of fines and iron ore pellets totaled 73.2 million tons between April and June of the year, with 64.3 million tons of iron ore (down 2.3% year-on-year) and 8.8 million tons of pellets (up 15. 6%).

In the quarter, iron ore production reached 74.1 million tons, down 1.2% year on year.

In addition to the results, Vale announced the distribution of dividends in the gross amount of R$3.57 per share.

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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