Vale’s 2Q15 results
Vale S.A. (VALE) reported its 2Q15 results on July 30, 2015. Overall results were a beat on market expectations. The company reported an adjusted EPS (earnings per share) of $0.19, which was 55% above consensus. Vale’s 2Q15 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 38% quarter-over-quarter.
Vale’s stock price fell 6.5% after Vale announced its results. The results were a beat on expectations for cost improvements, but investors seem concerned about the increasing leverage and funding gap on its S11D project. In addition, weaker iron ore prices in general pulled iron ore miners’ stock prices down.
In this series, we’ll analyze Vale’s 2Q15 earnings. We’ll look at its production and cost performance. We’ll also discuss important points mentioned during the conference call, including key points about curtailing iron ore capacity and Vale’s divestment plan going forward.
Vale is a Brazilian multinational diversified metals and mining company. It’s the world’s largest producer of iron ore and iron ore pellets. It’s the world’s second largest nickel producer. Vale also produces manganese ore, ferroalloys, coal, copper, PGMs (platinum group metals), gold, silver, cobalt, potash, phosphates, and other fertilizer nutrients.
Other companies in the seaborne iron ore trade include Rio Tinto (RIO), BHP Billiton (BHP), Fortescue Metals Group (FSUGY), and the Australian division of Cliffs Natural Resources (CLF). Together with Vale, these companies account for more than 70% of the seaborne iron ore supply.
Investors can also consider investing in ETFs such as the SPDR S&P Metals and Mining ETF (XME), which invests in the metals and mining sector. All listings of BHP, RIO, and VALE form 32.1% of the iShares MSCI Global Metals & Mining Producers ETF (PICK). CLF forms 3.0% of the XME holdings.