JOHANNESBURG (miningweekly.com) – Brazilian mining giant Vale had a record-breaking 2010, with net earnings hitting $17,3-billion, which CEO Roger Agnelli said was the highest-ever in the mining industry.
Vale, which released its results late on Thursday, said fourth-quarter net earnings soared to $5,9-billion, from $1,5-billion a year earlier.
“We are living through our best days,” Agnelli said, adding that “even better days” were still ahead.
Last year was the company’s best-ever performance, characterised by all-time high figures for operating revenues, operating income, operating margin, cash generation and net earnings.
Vale reported operating revenues of $46,5-billion in 2010 and $15,2-billion in the fourth quarter.
Operating income, as measured by adjusted earnings before interest and tax, climbed to $21,7-billion, while fourth quarter figures totalled $7,2-billion. Vale’s operating margin achieved another record of 47,9% in 2010, which reached 48% in the fourth quarter.
Cash generation, as measured by adjusted earnings before interest, tax, depreciation and amortisation, reached an all-time high of $26,1-billion in 2010 and $8,9-billion in the fourth quarter.
Capital expenditures (capex) excluding acquisitions, was at the highest recorded level of $12,7-billion in 2010, and also the largest capex in the global mining industry.
Vale, which listed in Hong Kong in December, had invested the $12,7-billion in the maintenance of existing assets and the exploitation of multiple organic growth opportunities.
Six projects were delivered in 2010, namely the additional 20-million-ton a year iron-ore expansion of Carajás operations, the TKCSA steel slab plant, the Bayóvar phosphate rock mine, the Tres Valles copper operation, the Onça Puma ferronickel operation and the Oman iron-ore pellet operation.
The company spent a further $6,7-billion to finance acquisitions, including fertiliser assets in Brazil.
“In total, Vale's investment in 2010 reached $19,4-billion. We allocated the greatest amount of resources in the global mining industry to fund the creation of new platforms for future growth to sustain high performance,” said Agnelli.
The return of capital to shareholders also reached record levels of $5- billion in 2010, through a dividend distribution of $ 3-billion, equal to $0,57 a share, and the execution of the share buy-back programme of $2-billion.
Agnelli is upbeat about the company’s outlook, given Vale’s pipeline of growth projects amid a scenario of sustained global demand growth for its products.
He added that 2010 was a year of strong recovery and striking performance, owing to the combination of two powerful forces.
“On the one hand, the initiatives developed by the company in response to the global economic downturn, embracing change and structural transformation, began to bear fruits. On the other hand, the global economy, led by emerging economies, the main drivers of the demand for minerals and metals, showed an above-trend growth, rallying from the depressed levels of late 2008/early 2009,” Agnelli explained.
The company had also invested $737-million in environmental protection and conservation and $399-million in social projects, totalling expenditures of $1 136-billion in corporate social responsibility.