UPDATE 3-Brazil’s Vale posts record iron ore, nickel output even as prices slump – by Jeb Blount (Reuters India – February 18, 2016)


Feb 18 Brazilian miner Vale SA produced record amounts of iron ore, nickel, copper, cobalt and gold as it battled a slump in global metals prices by boosting output in search of greater market share.

Results, though, were below what some analysts expected even as they helped Vale, the world’s third-largest mining company, meet some of its own output targets.

Fourth-quarter iron ore production rose 2.4 percent year on year to 88.4 million tonnes, its largest ever fourth-quarter total, the company said on Thursday. Output was down 3 percent compared with the third quarter.

Vale preferred shares, the company’s most-traded class of stock fell 2.9 percent in afternoon trading on Thursday in Sao Paulo to 8.34 reais, its first decline in five days.

“Production fell short of both our estimate and consensus and surprisingly was down 3 percent on a sequential basis,” said Garrett Nelson and Jason Nguyen, metals and mining analysts with BB&T Capital Markets in Richmond, Virginia in a note to clients.

As a result, Nelson and Nguyen cut their fourth-quarter outlook for Vale earnings before interest, taxes, depreciation and amortization, or EBITDA, a measure of cash flow from operations, by 3.5 percent to $1.39 billion. Vale releases fourth-quarter and full-year financial results on Feb. 25.

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