TORONTO (miningweekly.com) – The NYSE-listed stock of the world’s largest iron-ore producer, Brazil’s Vale, on Thursday trended lower after the diversified miner reported a significant fourth-quarter net loss, as the collapse of the steelmaking commodity’s price weighed on its bottom line. 

Despite narrowing the net loss for the three months ended December 31 to $1.85-billion, compared with a loss of $6.5-billion in the comparable period of 2013, investors were disappointed with the company’s reported underlying earnings of negative $251-million, or $0.05 a share, for the quarter.

Vale wrote down $1.15-billion in assets in 2014, mainly as a result of booking impairment charges on fertiliser projects in Brazil and the Simandou iron-ore project, in Guinea.

Analysts had expected fourth-quarter adjusted earnings of $0.19 a share, on revenue of $9.04-billion.

Vale reported revenue for the fourth quarter of  $9.23-billion, down 30% from $13.3-billion in the comparable quarter a year earlier.

The company posted full-year net income of $657-million, up 12.5% from $584-million in 2013.

Iron-ore prices had hit their lowest level in six years, signalling the death knell to many smaller operators, as the major producers, especially in Australia, flooded the market with increased output to leverage economies of scale.

Vale also reported that the decrease in sales prices was partly offset by higher sales volumes of iron-ore and pellets, with record iron-ore and pellet output for the quarter at 83-million tonnes and 11.6-million tonnes, respectively.

The share of its ferrous minerals business in gross operating revenues increased to 67.3% from 64.2% in the previous quarter, mainly owing to improving iron-ore and pellet sales volumes that were underpinned by increased output from Carajás. Base metals decreased its share in gross revenues from 23% in the third quarter to 21.1% in the fourth and the fertilisers share decreased from 8.1% to 6.6% in the fourth quarter, while coal maintained its share at 2.2%.

Nickel output was 73 600 t in the fourth quarter, 1 500 t higher than in the preceding quarter, reaching the best performance ever despite operational issues in the smelter and matte processing at Sudbury, Ontario, in the fourth quarter.

Copper output was 105 400 t in the three-month period, up 11.4% compared with the same quarter of 2013, reaching an output record with the ramp-ups of Salobo I and II.

Gold output was 93 600 oz in the period.

Despite reporting a reduction of $1.22-billion in expenses across all businesses in 2014, Vale had optimised and revised down its capital budget plan and was intensifying its corporate simplification and cost-cutting efforts, while accelerating the divestment and partnership initiatives to unlock value and build the foundations for strong free cash-flow generation by 2017 onwards.

Vale’s NYSE-listed shares fell almost 6% on Thursday to a low of $7.39 apiece in the morning session.