August 7, 2008
August 7th (Bloomberg) – Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, said second-quarter profit climbed 22 percent to the highest ever on record contract prices for supplies sold to steel producers.
Net income rose to $5.01 billion, or $1.02 a share, from $4.095 billion, or 85 cents, a year earlier, Rio de Janeiro-based Vale said today in a statement posted on the Brazilian security regulator’s Web site. The results topped the average estimate of 91 cents a share from eight analysts surveyed by Bloomberg News.
Sales surged 22 percent after Vale won annual price increases of at least 65 percent in supply contracts for iron ore, which accounted for more than half of sales in the quarter. Still, profit was eroded as the average price of nickel, the company’s second-biggest source of revenue, fell 43 percent from a year earlier.
“The market is in a buying mood after this result,” said Daniel Gorayeb, an analyst at Spinelli SA in Sao Paulo. “The company managed to take advantage of market demands by producing more of its higher-value products and focused more on what was of interest, which conveys a positive image.”
Vale, led by Chief Executive Officer Roger Agnelli, is spending $59 billion in the five years through 2012 to increase iron-ore capacity by 40 percent to 450 million metric tons a year and double nickel and copper production. Vale raised $12.1 billion in a July share sale, the biggest ever by a Brazilian company, to fund expansion and acquisitions.
The value of Vale’s iron-ore sales climbed 72 percent to $6.12 billion in the quarter, while nickel plunged 41 percent to $1.87 billion.
Vale this year negotiated a sixth annual increase in contract prices for its iron ore, the main raw material used to make steel. Nickel for delivery in three months averaged $25,919.69 a metric ton on the London Metal Exchange during the quarter, down 43 percent from a year earlier.
Vale said profitability at its nickel operations are high because the company is a low-cost producer.
“In the medium term, the combination of a reduced level of stainless-steel stockpiles and a drop in nickel inventories creates a favorable environment for the strong recovery of prices of the metal,” Vale said in the statement.
Agnelli is seeking to expand in coal and copper as quarterly profit growth slowed from a 69 percent average in the past four years. In May, Agnelli told business leaders in Rio de Janeiro that “if Vale doesn’t grow, it will be swallowed.”
Net revenue rose to $10.6 billion from $8.69 billion in the second quarter of 2007. Vale was expected to post sales of $11.8 billion, the average of four estimates compiled by Bloomberg.
The results are based on generally accepted accounting principles in the U.S.
Based on Brazilian accounting standards, profit fell 22 percent as a weaker dollar eroded the value of exports when converted back into the local currency. Net income fell to 4.57 billion reais ($2.9 billion), or 94 centavos a share, from 5.84 billion reais, or 1.21 reais a share, a year earlier, Vale said in a statement on its Web site. Sales climbed 3 percent to 18.3 billion reais.
Most of Vale’s sales are priced in dollars. The U.S. currency fell 17 percent against the Brazilian real in the 12 months through the end of the second quarter.
Vale’s American depositary receipts gained 2.3 percent to $27.30 at 7:21 p.m. in after-hours trading in New York.
In regular Sao Paulo trading, Vale rose 1.9 percent to 36.71 reais. The stock has declined 28 percent this year, compared with a 9.9 percent drop for Brazil’s Bovespa stock index.
July 31, 2008
July 31st (The Australian Business) – PORTMAN’S first half net profit has more than doubled to $137.1 million from $57.1 million last year, with iron ore prices behind the rise.
Portman (ASX: PMM) said profits were boosted by the increase in the benchmark price of iron ore with increases of 80 per cent for fines and 97 per cent for lump agreed earlier this year.
The iron ore miner, which is 85 per cent owned by Cleveland-Cliffs, said it expects to produce 8 million tonnes of iron ore in 2008, with 7.7 million tonnes coming from its Koolyanobbing operation and 300,000 tonnes from Cockatoo Island.
Portman said the pre-feasibility study of a potential expansion of Koolyanobbing beyond 8.5 million tonnes a year is planned to be completed during the second quarter of 2009.
July 24, 2008
July 24th (Steel Guru) – Indian iron ore major Sesa Goa Limited has announced the following unaudited results for the quarter ended June 30th 2008.
Sesa Goa Limited has posted a profit after tax of INR 6447.20 million for the quarter ended June 30th 2008 as compared to INR 1188.60 million for the quarter ended June 30th 2007. Total Income has increased from INR 4643.10 million for the quarter ended June 30th 2007 to INR 13109.30 million for the quarter ended June 30th 2008.
Sesa Goa Limited has posted a net profit of INR 6330.70 million for the quarter ended June 30th 2008 as compared to INR 1313.30 million for the quarter ended June 30th 2007. Total Income has increased from INR 5283.10 million for the quarter ended June 30th 2007 to INR 13411.60 million for the quarter ended June 30th 008.
June 4, 2008
June 4th (RTTNews) – Indian Mining industry would touch the $30 billion mark in 4 years and would account for 2.5% of GDP, said a report by financial services firm Edelweiss.
The country ranks among the global top 10 for deposits in iron ore, coal, bauxite contributing 3%, 10% and 4% respectively of the world’s resources.
The report said that with strong potential for further development and scaling up the country could achieve the target if it develops a conducive regulatory framework and attracts significant investment in exploration, mine development and infrastructure.
May 30, 2008
May 30 (Iron Ore Daily Post) – Russian Mechel’s iron ore production remained unchanged in the 2007 fiscal year, compared to FY 2006, according to quarterly results posted by the company yesterday. It reached an output of 4.96m tonnes of iron ore concentrates, pratically the same level than the previous fiscal year. On the other hand, Mechel’s mining arm lifted the output in other segments, such as coking coal and nickel, respectivelly by 7% and 19%.