VALE S.A. VALE'S PERFORMANCE IN 1Q16
www.vale.com rio@vale.com
Tel.: (55 21) 3485-3900
Investor Relations Department
Rogério T. Nogueira André Figueiredo Carla Albano Miller
Fernando Mascarenhas Andrea Gutman
Bruno Siqueira Claudia Rodrigues Mariano Szachtman Renata Capanema
BM&F BOVESPA: VALE3, VALE5 NYSE: VALE, VALE.P
HKEx: 6210, 6230
EURONEXT PARIS: VALE3, VALE5 LATIBEX: XVALO, XVALP
Except where otherwise indicated the operational and financial information in this release is based on the consolidated figures in accordance with IFRS and, with the exception of information on investments and behavior of markets, quarterly financial statements are reviewed by the company's independent auditors. The main subsidiaries that are consolidated are the following: Compañia Minera Miski Mayo S.A.C., Mineração Corumbaense Reunida S.A., PT Vale Indonesia Tbk (formerly International Nickel Indonesia Tbk), Salobo Metais S.A, Vale Australia Pty Ltd., Vale International Holdings GMBH, Vale Canada Limited (formely Vale Inco Limited), Vale Fertilizantes S.A., Vale International S.A., Vale Manganês S.A., Vale Moçambique S.A., Vale Nouvelle-Calédonie SAS, Vale Oman Pelletizing Company LLC and Vale Shipping Holding PTE Ltd.
ContentsOperating revenues 10
Costs and expenses 12
Adjusted earnings before interest, taxes, depreciation and amortization 15
Net income 16
Investments 19
Free cash flow 25
Debt indicators 26
Performance of the business segments 28
Ferrous Minerals 29
Base Metals 40
Coal 48
Fertilizer Nutrients 51
CONFERENCE CALL AND WEBCAST 54
Vale's performance in 1Q16
Rio de Janeiro, April 28, 2016 - Vale S.A. (Vale) delivered a sound operational performance in 1Q16, reaching several production records for a first quarter, namely: (i) total iron ore production1 of 77.5 Mt; (ii) Carajás iron ore production of 32.4 Mt; (iii) Tubarão pellet production of 7.2 Mt; (iv) nickel production of 73,500 t; and (v) copper production of 109,900 t.
Net revenues totaled US$ 5.719 billion in 1Q16, decreasing US$ 180 million vs. 4Q15 as a result of seasonally lower sales volumes of iron ore fines (US$ 612 million), base metals (US$ 107 million), and fertilizers (US$ 48 million), which were partly offset by higher sales prices for iron ore fines (US$ 584 million).
Costs and expenses, net of depreciation charges, totaled US$ 3.715 billion in 1Q16, decreasing by US$ 880 million vs. 4Q15. Costs decreased US$ 805 million (19%), mainly driven by lower sales volumes, and expenses decreased US$ 75 million (21%) as a result of lower SG&A, R&D and pre-operating and stoppage expenses.
SG&A2 totaled US$ 96 million in 1Q16, decreasing US$ 33 million (26%) from the US$ 129 million recorded in 4Q15, with reductions in personnel, services, selling expenses and others. R&D² totaled US$ 60 million in 1Q16, decreasing US$ 59 million (50%) from the US$ 119 million recorded both in 4Q15 and in 1Q15, with reductions across all business segments. Pre-operating and stoppage expenses² totaled US$ 102 million in 1Q16, decreasing US$ 136 million (57%) from the US$ 238 million recorded in 4Q15, mainly due to the absence of pre- operating expenses for VNC and the Nacala Logistics Corridor in 1Q16.
Adjusted EBITDA was US$ 2.005 billion in 1Q16, 44% higher than in 4Q15 mainly as a result of the improvement in the EBITDA for Ferrous Minerals (US$ 329 million) and Base Metals (US$ 218 million). Adjusted EBITDA margin was 35.1% in 1Q16, increasing from the 23.6% recorded in 4Q15.
Capital expenditures totaled US$ 1.449 billion in 1Q16, decreasing by US$ 744 million vs. 4Q15. Investments in project execution totaled US$ 920 million in 1Q16, with expenditures associated with the S11D project accounting for 69% of this total. Sustaining capex totaled US$ 529 million in 1Q16, decreasing US$ 298 million from the US$ 827 million recorded in 4Q15.
Net income totaled US$ 1.776 billion in 1Q16 vs. a net loss of US$ 8.569 billion in 4Q15. The US$ 10.345 billion increase in net income was mostly driven by the higher EBITDA, the impairment charges recorded in 4Q15 and the positive effect on financial results of the 8.7%
1 Excluding Samarco's attributable production and including iron ore acquired from third parties.
2 Net of depreciation charges.
Vale SA issued this content on 28 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 April 2016 09:14:16 UTC
Original Document: http://www.vale.com/EN/investors/information-market/Press-Releases/ReleaseDocuments/vale_IFRs_USD_1T16i.pdf
