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Miner Vale Q2's net profit drops by 24%, but exceeds analyst expectations

The Brazilian miner Vale announced on Thursday that its net profit for the second quarter of 2014 was down 24% from a year ago to $2.12 Billion, but still exceeded analyst expectations.

LSEG polled analysts who expected Vale to report a net profit of $1.44 billion for the June quarter. Vale's net income a year earlier was boosted due to the divestment by its PT Vale Indonesia subsidiary.

The revenue of the miner in April-June this year was $8.8 billion, which is exactly what analysts expected.

The key iron ore division of Vale saw revenue declines compared to the previous year, due to lower sales volumes and prices. However, copper and nickel revenues grew.

The average realized iron ore price in the first quarter was $85.1/ton, down more than 13% compared to a year earlier.

These lower prices led to a drop of 15% in adjusted earnings before taxes, depreciation, and amortization (EBITDA), totaling $3.39 billion.

Due to increased output and efficiency measures, the total cost of each category decreased by 10%, 60%, and 30% from last year.

Vale said that it also spent $200 million less in the third quarter of 2018 than it did a year earlier, allowing it to stay on track for its guidance of $5.9 Billion by 2025.

The company announced that it had also obtained a preliminary license for the Bacaba Copper Project, which is intended to prolong the life of Sossego Complex. Vale also started commissioning this month a second onca Puma furnace, where it hopes to begin nickel production by the end of the year. (Reporting and writing by Andre Romani, Marta Nogeuira and Daina Beth Solon, editing by Natalia Siniawski and Brendan O'Boyle, Cynthia Osterman and Brendan O'Boyle)

(source: Reuters)