Vale posts $12.13 B loss; fertilizer positive

Rio de Janeiro—Brazilian mining giant Vale SA reported a net loss of $12.13 billion on gross operating revenues of $26.05 billion in 2015. This compares to a net income of $657 million and revenues of $38.24 billion for the previous year. The group attributed the year-on-year decrease in income to lower commodity prices, especially iron ore, and to higher impairment charges in 2015 ($9.37 billion versus $1.15 billion in 2014). The 47 percent year-on-year depreciation of the Brazilian real against the U.S. dollar, which inflated the group’s debt, was also a major factor. Underlying earnings were a negative $1.70 billion in 2015, against a positive $4.42 billion in the previous year. Vale’s Fertilizers business segment saw its adjusted EBITDA more than double, to $567 million on net revenues of $2.23 billion in 2015, compared with 2014’s $278 billion and $2.42 billion, respectively. The increase was driven mainly by exchange rates and commercial and cost savings initiatives, and was partly offset by lower sales volumes and prices. Gross revenues from the sales of phosphates were 4.5 percent lower at $1.82 billion in 2015, down from $1.90 billion. Nitrogen fertilizer revenues declined 13.6 percent, to $355 million from $411 million, while potash revenues also were 13 percent lower at $147 million, down from $169 million in 2014. Sales volumes declined for most of Vale’s fertilizer products in 2015 compared with the prior year, although sales of MAP increased 3.9 percent, to 1.08 million mt from 1.04 million mt. Sales of other phosphates were largely lower year-on-year: SSP volumes amounted to 1.85 million mt (down 11.7 percent); TSP 744,000 mt (down 0.7 percent); dicalcium phosphate 459,000 mt (down 6.9 percent); and phosphate rock 3.19 million mt (down 2.0 percent). Potash sales were 2.5 percent lower at 463,000 mt from 475,000 mt. Nitrogen fertilizer sales fell 5.7 percent to 641,000 mt from 680,000 mt. Vale said while sales volumes were down, it increased its market share in Brazil. It expects Brazilian consumption will remain weak as buyers continue to postpone purchases due to credit issues and ag commodity prices.