Brazilian miner Vale SA (VALE3.SA) said on Thursday its second-quarter net income fell 18.9% from the previous year, hit mainly by a sharp decline in iron ore prices and escalating costs, but results still topped analysts’ estimates.
Vale, one of the world’s largest iron ore miners, posted net income of $6.15 billion, above expectations of $2.837 billion, according to a Refinitiv forecast. Recurring net income, however, fell 49.8% from the year before.
Vale is the latest global miner to be weighed down by higher costs tied to inflation and lower commodity prices. The company flagged that its iron ore, nickel and copper units had been affected by price increases in fuel and freight expenses, among others.
While Vale’s net operating revenue fell 32% from a year earlier, its expenses grew 8% in the same period, dragging down its overall results.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $5.25 billion, down 53.1% year-on-year.
In the three months ended in June 30, Vale realized $113.3 per tonne of iron ore, down from the $184.8 per tonne in the same period of 2021.
The company also said that expected expenses related to the 2019 Brumadinho dam disaster that killed hundreds of people fell $1 billion to $7.2 billion due to foreign exchange effects.