TORONTO (miningweekly.com) – Iron-ore major Vale has reported a net income of $424-million for the second quarter ended June 30, 84% less year-on-year than the $2.64-million in the same quarter a year earlier.

The Brazilian company attributed the fall in profits to once-off noncash charges that did not reflect the company's improved operational results.

While most revenue and debt is in dollars, the company's main accounting currency is the real and a weaker dollar means the local currency value of debt and debt payments rises, requiring it to take a financial charge, Vale said.

The company's profit had declined every quarter for the last two years as a result of China’s slower growth. China is the world’s biggest consumer of commodities such as iron-ore and copper.

Vale's net operating revenue for the period was $11.03-billion, an 11.5% decline from the $12.46-billion in the same quarter last year. Earnings before interest, tax, depreciation and amortisation fell 10% year-on-year to $4.96-billion from $5.5-billion.

During the quarter, some of the company’s commodities reached all-time-high output, such as copper output increasing 30.3% to 91 300 t, gold output rising to 63 000 oz and coal output increasing to 2.4-million tonnes. Nickel output rose 6.9% to 65 000 t, its best second quarter since the second quarter of 2008.

The increased output offset falling prices, however, as nickel prices declined 38% and copper was down 8.2% year-on-year.

Second-quarter Iron-ore sales were a little above planned at 61.9-million tonnes and 117.6-million tonnes in the first half of the year, which was in line with the same period of 2012.

Vale said the average price for its iron-ore shipments fell to $99.20/t from $111.70/t in the first quarter ended March 31, as the company managed to cushion the effect of the fall of the iron-ore daily price assessment for 62% iron-content ore to $125.95/t in the period, down from $148.40/t, given the mix of different pricing mechanisms in the company’s sales portfolio.