Brazilian miner Vale has announced its financial results for the first quarter this year, reporting a net profit of $1.77 billion, compared to a net loss of $8.57 billion in the fourth quarter of 2015, mostly driven by higher EBITDA and the positive effect of the 8.7 percent appreciation of the Brazilian real against the US dollar in the first quarter this year.
In the given period, the miner’s net revenues amounted to $5.72 billion, down 3.1 percent quarter on quarter, mainly due to lower sales volumes in iron ore fines, nickel and fertilizers. In the same quarter, Vale’s adjusted EBITDA was $2 billion, rising by 44 percent quarter on quarter, as a result of the improvement in the EBITDA for ferrous minerals and base metals segments. Meanwhile, Vale’s adjusted EBITDA margin was 35.1 percent in the first quarter, increasing from the 23.6 percent recorded in the previous quarter.
Vale stated that iron ore demand is expected to remain strong in the second quarter this year as the Chinese government stimulus continues to take effect. Although iron ore supply is expected to increase in the current year with a higher seasonal rebound in shipments in the second quarter, higher depletion should also play an important role to balance the market.