RIO DE JANEIRO--Brazilian mining giant Vale SA, the world's top
producer of iron ore, said Wednesday it suffered its biggest loss
ever in the fourth quarter, as a massive tax settlement and
impairment charges undercut a relatively strong performance by its
core operations.
Vale reported a net loss of $6.45 billion in the final three
months of the year, more than double the $2.65 billion loss posted
in the fourth quarter of 2012. Sales rose 8.5% from a year earlier
to $13.61 billion.
An ugly bottom line had been expected, as Vale had agreed in
November to pay 22.33 billion reais ($9.36 billion) to the
Brazilian government to settle a dispute over back taxes it
allegedly owed for profits on its overseas operations. The company
also booked impairment charges of $2.3 billion, mainly related to
the Rio Colorado potash project in Argentina, which Vale suspended
last year amid mounting costs.
Vale described 2013 as "a year for removing uncertainties and
establishing foundations." In a video posted to the company's
website, Chief Financial Officer Luciano Siani highlighted the
company's robust cash generation as measured by earnings before
interest, taxes, depreciation and amortization.
Vale's adjusted Ebitda rose 50% in the fourth quarter from a
year earlier to $6.64 billion.
"Those results were accomplished mostly thanks to the
cost-cutting efforts of the company, which shaved $2.8 billion from
2012 to 2013, notwithstanding the record results in terms of sales
of its main products," Mr. Siani said.
Vale posted record sales of iron ore, coal and copper last year.
Its average realized price for iron ore rose 13% in the fourth
quarter from the year-ago period to $112.97 per metric ton, while
the price it received for iron-ore pellets rose 16% to $150.17.
Write to Paul Kiernan at paul.kiernan@wsj.com
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