Brazilian miner Vale has recorded a decline in net profit in the first quarter of 2022 due to reduced production and increasing costs.

In Q1 2022, the iron ore miner’s net income attributable to its stockholders stood at $4.5bn, marking a 19.6% decrease from $5.54bn in the same quarter a year ago.

Vale’s proforma adjusted EBITDA from continuing operations for the first three months of 2022 was $6.37bn, a reduction from $8.62bn in the prior year.

This drop was attributed to a decreased sales volume for iron ore and pellets, mainly due to the rainy season.

Heavy rains in January 2022 resulted in partial suspension of operations at Vale’s southeastern and southern iron ore systems, reported Reuters.

The company posted net operating revenues of $10.81bn in the January-March 2022 quarter, versus $12.55bn in Q1 2021.

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By GlobalData

Vale CEO Eduardo Bartolomeo said: “Despite the challenging quarter in our operations, we are on track to deliver on our commitments for 2022.

“In Q1 2022, we faced heavy rainfall in Minas Gerais, licensing delays in the North and performance below par at some assets. Nevertheless, we took the opportunity of the seasonally lower volumes to concentrate our maintenance activities that will lead the way for a safer operational environment and solid production ahead.

“Confident about our business outlook, we are announcing a third share-buyback programme, as another lever of value creation for our shareholders.”

The company’s net debt increased to $4.9bn, driven by a $1.8bn share buyback and $4.7bn cash outflow in dividends distribution.

Capital expenditures rose to $1.13bn from $980m during this period.

The firm said in a statement: “Solid demand will keep industrial production growing in 2022 with delayed orders for factories with pandemic fading away.”