Vale’s profit reaches BRL 121.2 billion in 2021, up 353% compared to 2020

the mining company OK released its results for the end of 2021 this Thursday (24), with strong growth. In the fourth quarter, the earnings of the Brazilian giant added up to US$ 5.4 billion, an increase of 634% in relation to the same period of the previous year.

In 2021 as a whole, the mining company’s net income totaled US$ 22.4 billion, an increase of 360% compared to 2020. The company considers the results in dollars as official data on its balance sheet. In reais, profit was BRL 121.2 billion, up 353% compared to 2020.

The company’s revenue totaled US$ 54.5 billion, up 38% year-on-year. In reais, it was R$ 293.5 billion, an increase of 42% in the same comparison. Between October and December, Vale’s revenue reached US$ 13.1 billion.

Last year, the average price of iron ore sold by Vale was US$ 140.50 a ton, a value 30% higher than that recorded in the previous year. In the fourth quarter, however, the value dropped to US$ 106.8 per ton, down from US$ 126.70 in the previous quarter.

Sales of iron ore, its flagship, were 277.5 million tons, an expansion of 8.9%.

Last year, Vale invested US$ 5.28 billion, an increase of 18% in one year. For 2022, the company’s projection is that the investments will be slightly higher, at US$ 5.8 billion. The increase, however, is explained because investments ended up being postponed due to the pandemic.

The basis for comparison with the year 2020, however, is low. In 2020, the mining company’s results were affected by the effects of the Covid-19 pandemic, which reduced its production, and also by expenses related to the consequences of the tragedy in Brumadinho (MG), which left more than 270 dead in early 2019.

new expenses

Vale’s strong profit came despite an additional provision that it had to make for the de-characterization (ceasing its use) of tailings storage dams – which can rupture, as occurred in the tragedies of Mariana (of the subsidiary Samarco) and Brumadinho .

In addition, the company had to make a new provision related to the Renova Foundation, a body created to manage compensation payments related to the Mariana tragedy, which occurred in 2015, with 18 deaths.

In the document that accompanied the balance sheet, Vale’s president, Eduardo Bartolomeo, states that, despite the pandemic and market volatility, the company managed to “achieve significant milestones in the creation of sustainable value”. “We are also recovering our production capacity in iron ore and base metals,” he says.

In a recent report, analysts at BTG Pactual stated that Vale’s earnings are on an upward trajectory, a move that should be supported by the expectation of iron ore prices at higher levels with the recovery of Chinese steel production.

In its financial statement, Vale highlighted that the prospects for the commodity remain positive in view of the recovery of the economy.

Last year, Vale produced 315.6 million tons of iron ore, an increase of 5.1% compared to 2020. For this year, the mining company’s projection is for the volume to be between 320 million and 335 million tons. .

Vale clarified that, after the heavy rains that hit Minas Gerais in the first weeks of the year, its operations are now operating normally.

dividends

Faced with its high financial gain and without a major investment project in sight, Vale met a great expectation from investors and announced a dividend distribution to its shareholders of US$ 3.5 billion, with the payment to be made in March. this year. The amount, according to the company, will be paid at the beginning of March.