Vale Q3 beats expectations with record iron ore production, but prices fall

Global iron ore giant Vale (VALE.US) on Thursday reported a 15% YoY decline in Q3 net profit, mainly due to lower steelmaking raw material prices and the impact of provisions related to the collapse of the Mariana dam. However, the company's Q3 net profit reached $2.41 billion, topping analysts' expectations of $1.65 billion. Net revenue declined 10% YoY to $9.55 billion, close to analysts' expectations of $9.44 billion. Adjusted EBITDA was $3.62 billion, down 18% YoY, slightly above expectations of $3.61 billion. Vale's iron ore production in Q3 reached a new high since 2018, but the actual price of iron ore fines fell 14%. In addition, the company expects to reflect more than $900 million in new liabilities in Q3 profits related to the deadly dam collapse near Mariana.

It is worth noting that Vale plans to sign a $30 billion compensation agreement with BHP Group and Samarco Mining Company to address the aftermath of the accident.

Despite these challenges, Vale's financial performance showed some resilience and exceeded market expectations.