UPDATE 3-Brazil's Vale second-quarter profit falls 34 pct; shares drop

jueves 28 de julio de 2016 09:49 GYT
 

(Adds explanation of EBITDA and share action)

By Jeb Blount

RIO DE JANEIRO, July 28 (Reuters) - Brazilian mining company Vale SA said on Thursday that second-quarter net income fell 34 percent as provisions for potential losses from the burst dam at its Samarco subsidiary and higher taxes undermined productivity gains.

Vale, the world's largest iron ore producer, reported net income of $1.11 billion in the quarter, beating analysts' estimates but down from $1.68 billion a year earlier.

The average estimate of 10 analysts surveyed by Reuters was for net income of $1.03 billion in the quarter.

Net sales which is minus taxes also fell 5 percent to $6.63 billion as the average cost of iron ore for delivery at the Chinese port of Tianjin .IO62-CNI=SI dropped 5 percent in the second quarter from a year earlier, according to Thomson Reuters.

Preferred shares fell as much as 2.5 percent and were last off 1.1 percent to 14.92 reais.

Vale managed to cut operating costs, helping to boost profit from mining and other operations by 29 percent to $1.27 billion.

It also reduced net debt, or total debt minus cash and marketable securities, from the first quarter, and moved closer to completing a giant new iron ore mine in Brazil's Amazon that promises to reduce its falling costs even further, the company said.   Continuación...