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February 25, 2022

Vale reports surge in 2021 net income on iron ore boom

Net operating revenues soared 38% year-on-year to $54.5bn.

Mining firm Vale has reported net income attributable to its stockholders of $22.44bn in 2021, a 360% increase compared with $4.88bn in the prior year, particularly benefitting from rising iron ore prices.

Iron ore 62% Fe reference price averaged $159.5/dmt last year, up 46% from 2020.

The Brazilian firm’s attributable net income in Q4 2021 stood at $5.43bn, versus $739m in the same period a year ago. This growth was attributed to the ‘reclassification of cumulative foreign exchange variation in equity’.

Annual net operating revenues rose by 38% year-on-year to $54.5bn. Higher prices in ferrous minerals and copper drove rise in proforma adjusted EBITA to $33.77bn from $21.95bn.

Capital expenditures for the year to 31 December 2021 were $5.23bn, up 18% from $4.43bn in 2020.

Net debt in Q4 2021 was $1.87bn, down from the previous quarter figure of $2.21bn but higher than $769m in Q4 2020.

Cash flow from operations was $33.41bn, an increase from $18.89bn in the previous year.

In a press statement, the firm said: “The positive effects were partially offset by (i) the higher expenses related to Brumadinho, mainly due to the $1.7bn additional provision related to de-characterisation of upstream dams, and the (ii) lower Equity Results ($1.1bn), largely due to the additional provisions related to Renova Foundation.”

Vale CEO Eduardo Bartolomeo said: “In a year still marked by the persistent effects of the Covid-19 pandemic and market volatility, we were able to deliver significant achievements in creating sustainable value to all our stakeholders.

“In line with our new pact with society, we advanced in repairing Brumadinho and Mariana and reinforced our support for the fight against the pandemic.

“We also announced investments of up to $6bn to reduce emissions and defined our social ambition to create a legacy of education, health and income in the communities we operate.”

Iron ore production grew 5.1% in 2021 from 2020. As for future projections, the miner has a positive long-term outlook for iron ore, nickel and copper.

Besides, Vale anticipates ‘slight’ growth in global steel production this year. 

The company also approved dividends of $3.5bn for its shareholders.

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