Home Market News Vale Reports Q3 Profit Decline but Beats Estimates; Announces Potential $4B Payout to Shareholders

Vale Reports Q3 Profit Decline but Beats Estimates; Announces Potential $4B Payout to Shareholders

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Vale Reports Q3 Profit Decline but Beats Estimates; Announces Potential $4B Payout to Shareholders
Iron ore pellets close up

Maksym Isachenko/iStock via Getty Images

Vale, the Brazilian multinational mining company (NYSE:VALE), announced its third-quarter financial results on Thursday. Although the company reported a decline in net earnings compared to the previous year, it still managed to surpass analyst expectations. Additionally, Vale unveiled plans to distribute approximately $4 billion to its shareholders through dividends and stock buybacks.

The board approved a dividend and interest on capital payout of 10.57 billion reais, equivalent to around $2.1 billion. Furthermore, Vale intends to initiate a share buyback program, potentially acquiring up to 150 million shares, which, given current stock prices, could bring the total payout to shareholders to a combined $4 billion.

Despite the drop in net income from continuing operations in Q3, which declined to $2.84 billion from $4.5 billion compared to the same quarter last year, Vale’s results still outperformed the analyst consensus compiled by LSEG, which projected earnings of $2.55 billion.

On a positive note, net operating revenues for the third quarter increased to $10.6 billion from $9.9 billion in the previous year. Additionally, adjusted EBITDA from continuing operations rose to $4.2 billion, up from $3.7 billion in the same quarter last year.

During Q3, Vale observed a rise in the average realized price for iron ore fines, which reached $114.00 per metric ton, compared to $103.30 per ton in the previous year. However, the price for iron ore pellets, a premium product, experienced a decrease to $161.20 per ton from $194.3 per ton in the same period last year.