Brazilian iron ore company Vale reverted a BRL 5.9 billion ($2.5 billion) net profit in Q1 2014 to a BRL 9.5 billion ($3.1 billion) net loss in Q1 2015, the company said.
Vale’s adjusted EBITDA declined 16.8 percent quarter-on-quarter to BRL 4.6 billion ($1.6 billion), and 51.5 percent year-on-year when compared to Q1 2014. According to the company the decline is a result of “lower prices and lower seasonal sales volumes”.
The company’s net revenue totaled BRL 18 billion ($5.9 billion) in Q1 this year, declining 19.6 percent year-on-year and 22.1 percent quarter-on-quarter.
Vale also said average sale prices for iron ore fines in Q1 fell by 51.4 percent from $94.79/mt to $46.01/mt, year-on-year. Pellet prices declined 39.7 percent from $147.31/mt to $88.76/mt, year-on-year.
During a call with investors held this Thursday the company said it may cut its iron ore output forecast by up to 30 million mt for the next two years as it faces falling prices for the commodity, the company's head of ferrous, Peter Poppinga, said.
However, the company showed some optimism by saying “2015 will be a year to establish the basis of a company that is even more competitive and profitable.” In a statement, Vale said it has intensified and consolidated its efforts in cutting costs, delivering an improvement in productivity, increasing its production volumes and raising the quality of its products “with the completion of many projects.”
In a filing to the nation’s securities exchange commission, CVM, Vale denied it could lease iron ore carrier carriers with Chinese shipbuilders. However, it admitted it signed an agreement with Cosco for strategic cooperation in iron ore shipping.
In September last year, Vale announced “four existing very large ore carriers of 400,000 tons deadweight owned and currently operated by Vale will be transferred to Cosco and chartered by Vale on a long term basis for 25 years.”