Vale CEO eyes first quarter results in line with fourth quarter
RIO DE JANEIRO – Brazilian miner Vale should achieve results in the first quarter that are similar to those in the final three months of 2017, the chief executive officer of the world's top iron-ore producer said on Wednesday.
In a conference call after the company reported a nearly 50% jump in profit in the fourth quarter, Fabio Schvartsman said the similar financial performance would come despite what is usually a weaker January to March period.
"In terms of Vale's overall performance for the first quarter of 2018, despite the fact that admittedly the first quarter is seasonally weaker, we still expect to deliver results substantially in line with fourth-quarter results last year," he said.
Executives also forecast iron-ore prices to be sustained by economic growth and growing steel output, and said Vale is happy when prices per tonne are in the $60 to $70 range. Iron-ore for prompt delivery at the Qingdao port in China was quoted on Wednesday at $78.61/t.
Vale's actions will weigh heavily on those prices, as it will account for half the 40-million tonnes of new iron-ore in the seaborne market that it expects will come online this year, executives said.
The miner also reiterated its promise to shift its dividend policy in the second half of the year, as it marks its deleveraging efforts.
The company reported a 14% cut in net debt to $18.14-billion in the fourth quarter and plans to slash it to $10-billion by mid-2018.
Vale's board approved a $781.25-million dividend before results were released on Tuesday.
Vale executives also said on Wednesday that, as the world's top nickel producer, it plans to reduce costs in all its nickel operations by 10% this year, which they said implied savings well above $150-million.
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