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Vale posts first quarterly net loss since 2002

Keywords: Tags  Vale, Brazil, loss, write-down, impairment, CSA, Onça Puma, nickel coal

SÃO PAULO — Vale SA posted its first quarterly net loss since the third quarter of 2002 after writing down a series of assets and investments.

The Rio de Janeiro-based miner’s net loss totaled $2.65 billion in the fourth quarter of 2012, in contrast to net income of $4.67 billion in the year-earlier period, the company said Feb. 27.

Impairment charges on assets, including Vale’s Onça Puma nickel project in Brazil and its Australian coal operations, reached $4.02 billion.

Meanwhile, the company’s impairment charges on investments totaled $1.64 billion. This included a $583-million charge on Essen, Germany-based ThyssenKrupp AG’s Cia. Siderúrgica do Atlântico slab plant in Rio de Janeiro state, which is 26.87-percent controlled by Vale, as well as a $975-million write-down on Vale’s stake in Oslo, Norway-based Norsk Hydro ASA.

Vale’s earnings before interest, taxes, depreciation and amortization (Ebitda) fell to $257 million in the fourth quarter from $7.4 billion a year earlier.

Excluding nonrecurring charges, the company’s adjusted Ebitda fell 40.6 percent to $4.39 billion.

Vale’s underlying earnings were at $11.24 billion in 2012, down from $23.23 billion in 2011. Including the accounting effects of nonrecurring items registered in the fourth quarter, the miner’s net income totaled $5.5 billion last year, down from $22.9 billion in 2011.

A version of this article was first published by AMM sister publication Metal Bulletin.

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