Operating revenues fell 10.7% quarter-on-quarter to $11.2 billion, also down from the $11.8 billion reported in the first quarter of 2012, primarily due to the effect of lower volumes.
The first quarter was marked by a strong operational performance of Vale’s base metals assets, with copper and cobalt posting record production and nickel presenting its best quarter since 2009, with output totalling 65,000 tonnes, up from 63,000t in the previous corresponding period.
Adjusted earnings before interest and tax came in at $4.2 billion for the first quarter, well above the $2.9 billion reported in the December quarter and also beating the $3.9 billion in Q1 2012.
Cash generation, measured by adjusted earnings before interest, tax, depreciation and amortisation was 18.2% higher than the December quarter and nearly 5% above the previous year’s figure of $5.2 billion.
This was the second highest figure for a first quarter in the company’s history, coming second only to 2011 when iron ore, nickel and copper prices peaked on the back of the sharp recovery from the global financial crisis.
While underlying earnings saw a gain of nearly 64% quarter-on-quarter, coming in at $3.2 billion compared to $1.9 billion for the December quarter, it was not enough to edge out the figure year-on-year as Vale posted earnings of $3.5 billion in the first quarter last year.
Vale attributed the gains to a reduction in operating costs as well as selling, general and administrative expenses, something it said would continue into the future.
“It is not a one-off event and we remain strongly committed to pursuing further significant decreased in operating costs, SG&A and other expenses,” the company said.
“Despite the progress achieved, there is still a long road towards the transformation of the cost structure to guarantee shareholder value creation through the cycles, mitigating the influence of price gyrations.”
Vale will pay the first tranche of the minimum dividend, announced in January, on April 30, which amounts to $2.25 billion, or 43.66c per share.
