Miner Vale’s net profit will fall by 17% due to lower iron ore prices

RIO DE JANEIRO/SAO PAULO (Reuters) – Brazil’s Minor Veil reported a 17% decline in net profit for the first quarter on Thursday.

Vale, one of the world’s largest iron ore producers, recorded net profit of $13.9 billion in the quarter ending March, slightly lacking consensus estimates from analysts voted by LSEG.

The company said revenues were hit by a drop in iron ore prices, but the impact was partially offset by measures to reduce production costs and Brazil’s real appreciation for the US dollar.

“We have gotten a consistent start to the management goals for 2025,” CEO Gustavo Pimma said in his revenue report, pointing to good cost momentum.

Vale posted adjusted core earnings measured by previous earnings on interest, tax, depreciation and amortization (EBITDA) to $3.12 billion and $3.12 billion, close to the analyst’s expected $3.16 billion.

The results were in line with expectations, with cost performance being the highlight, said an analyst at ITAU BBA. However, they added, “low realised prices are greater than offsetting improvements in the volume of comparison and cost reductions in annual comparisons.”

The so-called C1 cash cost of iron ore fine veils, which measure the cost of production from mine to port, fell 11% in the quarter to $21 per tonne.

Last week’s miners’ operational report showed that iron ore production had fallen by 4.5% due to heavy rains in Brazil, but Vale was able to increase sales through supply from inventory.

Still, the market reference price for Vale’s main product, iron ore, fell 16%, weighing its own selling price, and net revenue of 4% fell to $8.12 billion, analyst estimates just above $8.03 billion.

Santander analysts said that Veil presented him with a “solid operational guy,” but they were already “pricing.”

(Reporting by Marta Nogueira of Rio de Janeiro and Andre Romani of Sao Paulo, edited by Brendan Oboil and Rashmi Eich)