UPDATE 3-Vale returns to profit, signals cut to 2016 iron ore outlook

jueves 30 de julio de 2015 11:33 GYT
 

(Adds executive's comments, company background, share price)

By Stephen Eisenhammer

RIO DE JANEIRO, July 30 (Reuters) - Vale SA, the world's biggest iron ore producer, returned to profit in the second quarter, bolstered by higher output and cost cuts as it kept up pressure on Australian rivals in its fight for market share.

But as the Brazilian miner battles to increase margins, Vale said iron ore production next year will likely be less than the 376 million tonnes it had previously forecast.

"Probably we'll be between the guidance we gave... and the 340 million tonnes we are producing in 2015," iron ore chief Peter Poppinga told analysts on a conference call, adding the company was phasing out higher-cost production.

Vale overcame a slump in iron ore prices to report a net profit of $1.68 billion on Thursday, moving into the black for the first time in a year. That was a jump of 17.3 percent from the same quarter a year ago, and more than four times the average forecast of $408 million of six analysts in a Reuters poll.

The performance "shows the company is prepared for the challenging commodities scenario," Chief Financial Officer Luciano Siani said.

A big part of the improved result was a reduction in cash costs, with Vale lowering its cost of producing a tonne of iron ore to $15.8 per tonne, from $18.3 per tonne in the first quarter.

With the iron ore price .IO62-CNI=SI about half of its year-ago level, mining companies have focused on reducing costs to survive the slump.   Continuación...