RIO DE JANEIRO--Brazilian mining giant Vale SA (VALE, VALE5.BR) chalked up a net loss for the first time in more than a decade Wednesday, as billions of dollars in write-downs hammered its fourth-quarter results.
Vale, the world's top producer of iron ore and No. 2 miner of nickel, reported a much larger-than-expected net loss of $2.65 billion in the fourth quarter, compared with a $4.67 billion profit a year earlier. The company had been expected to post a net loss of $840 million, according to the median estimate in a Dow Jones Newswires survey of analysts.
Operating revenues slid 19% from the fourth quarter of 2011 to $12 billion, as prices for iron ore and other products fell short of fourth-quarter 2011 levels.
Vale's earnings before interest, taxes, depreciation and amortization, or Ebitda, plunged to $257 million in the October to December period, down from $7.4 billion a year earlier. Excluding nonrecurring charges, the firm's adjusted Ebitda fell 41% to $4.39 billion.
"The last year brought great challenges to our company," Chief Executive Murilo Ferreira said in a conference call with journalists.
Dragging on the company's results were a series of impairment and nonrecurring charges, including a $4.2 billion write-down of nickel and aluminum assets. The company also took a $232 million charge to settle a tax dispute with Switzerland and a $254 million charge for back tax payments to Brazil's Minas Gerais state.
Vale's shares have fallen 13% since the end of 2012, partly as investors braced for the company to report its first quarterly loss since 2002. The shares closed Wednesday up 3.4% at 35.45 Brazilian reais ($17.98).
From an operating standpoint, the fourth quarter marked a turnaround from the previous three months, after China's economic slowdown sent global prices for iron ore sinking to a three-year low in September. Vale's average sales price for the steelmaking component rose 12% from the third quarter to $93.66 per metric ton.
Vale, the world's third-largest mining company by market capitalization, said it invested $17.7 billion in 2012, less than the $21.4 billion in approved capital expenditures.
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