Brazil's Vale Profit Declines 34%
28 Julho 2016 - 9:58AM
Dow Jones News
By Rogerio Jelmayer
SÃO PAULO -- Brazilian mining company Vale SA saw a 34% decline
of its net profit in the second quarter, as it adopted a provision
worth $1.2 billion relating to last year's deadly dam failure at
its iron-ore mining operations it jointly owns with BHP Billiton
Ltd.
Vale on Thursday reported a second-quarter net profit of $1.1
billion, down from $1.68 billion in the year ago period.
The company said it recorded provisions to cover estimated
funding needed by the Samarco Mineracao SA joint venture under an
agreement signed with Brazilian authorities in March. In a separate
statement, BHP said it would record a provision of between $1.1
billion and $1.3 billion.
The Samarco dam spill released an avalanche of sludgy mine waste
that killed 19 people, destroyed villages and polluted more than
400 miles of rivers before spewing into the Atlantic Ocean. It is
widely considered to be Brazil's worst-ever environmental
catastrophe.
Currently, Samarco is unable to conduct activities, under orders
of the authorities.
"Samarco cannot make a reliable estimation of how and when its
operations will be resumed. Nonetheless, Samarco's current
assessment is that the probability of resuming operations in 2016
is highly unlikely," Vale said in a statement.
Meanwhile, Vale's net operating revenue was $6.6 billion in the
second-quarter, down from $6.9 billion in the prior period.
The company said 55.4% of its revenues were generated by sales
to Asia-based clients in the second quarter, up from 51.9% in the
year ago period.
Its net debt ended the period at $27.5 billion, up from $26.5
billion in the second quarter a year ago.
The company invested $1.37 billion in its operations in the
second quarter, down from $2.1 billion in the second quarter of
2015.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
(END) Dow Jones Newswires
July 28, 2016 08:43 ET (12:43 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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