On May 5, the world's largest iron ore producer Brazilian miner Vale SA issued its financial results for the first quarter of 2010, reporting "a solid performance" as a result of efforts to minimize costs and the strong recovery of global demand for minerals and metals.
According to the financial results, the net profit of the company was $1.6 billion in the first quarter of 2010, compared with a net profit of $1.52 billion in the last quarter of 2009, increasing 5.6 percent, and a net profit of $1.36 billion in the first quarter of 2009, increasing 17.7 percent.
Operating revenues of $6.85 billion in the first quarter of 2010 were 4.7 percent higher than $6.54 billion in the last quarter of 2009 and 26.3 percent higher than $5.42 billion in the first quarter of 2009.
The adjusted EBITDA of the company was $2.85 billion in the first quarter of 2010, compared with an adjusted EBITDA of $2.14 billion in the last quarter of 2009, increasing 33.1 percent, and $2.28 billion in the first quarter of 2009, increasing 25.2 percent.
Meanwhile, sales to Asia represented 51.6 percent of the total revenues, while sales to the Americas accounted for 25.2 percent, Europe 19.8 percent and the rest of the world 3.3 percent. On a country basis, China is the leading market, responsible for 31.5 percent of the company's revenues, Brazil accounts for 18.4 percent, Japan 12.2 percent, Germany 6.2 percent and South Korea 3.4 percent.
Revenues generated from the sales of ferrous minerals accounted for 69 percent of first quarter operating revenues, 65.9 percent being iron ore and pellets. Non-ferrous minerals contributed 23.9 percent to the revenues, logistics services 4.5 percent, coal 1.8 percent and other products 0.8 percent.
Commenting on the results, the company said, "As a consequence of the structural changes in the global iron ore market, we have reached agreements, permanent or provisional, with all our iron ore clients around the globe to move existing contracts to index-based prices. The implementation of the new pricing system will begin to be reflected in our financial performance in the second quarter of 2010."