VALE Vale SA

SÃO PAULO--Brazilian mining giant Vale SA reported a 36% drop in net profit in the first quarter from a year earlier, putting the decline down mainly to currency losses as well as the lower price of iron ore.

Vale said its first-quarter net profit fell to $1.59 billion in the first three months of the year from $2.49 billion a year earlier. Cash flow as measured by earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 8% in the first quarter from a year earlier to $3.97 billion.

Financial losses related to fluctuations in Brazil's currency and interest rates totalled about $185 million in the first quarter, compared to gains of $229 million in the same quarter last year. Vale also said it sold its core iron ore product at a lower average price of $66.4 a tonne in the first three months of 2018, compared to $75.78 in the first quarter of last year.

Chief Executive Fabio Schvartsman said in a filing Wednesday that the company was still well-positioned to generate shareholder value, saying he planned to make Vale a "more predictable company."

"Thus, in any given price scenario, the market will be able to easily forecast Vale's performance," Mr. Schvartsman said.

Net operating revenues rose 1% to $8.60 billion in the first quarter from a year earlier.

In its filing Wednesday, Vale also reported its lowest level of investment for any first quarter since 2005. The Rio de Janeiro-based company invested $890 million in the first quarter, compared to $1.11 billion a year earlier.

After the company opened its vast S11D mining project in the middle of Brazil's Amazon rain forest at the end of 2016, it has said that its near-term strategy is to rein in investment and focus on boosting investors' returns.

Write to Samantha Pearson at samantha.pearson@wsj.com

(END) Dow Jones Newswires

April 25, 2018 21:06 ET (01:06 GMT)

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