RIO DE JANEIRO , July 30 /PRNewswire-FirstCall/ -- Vale (NYSE: VALE) would like to share the highlights of it's Webcast about the company's performance in the 2Q of 2010.
Main highlights of Vale's Webcast:
http://www.vale.com/en-us/investidores/press-releases/pages/default.aspx
The main highlights of Vale's performance in 2Q10 were:
- Operating revenue of US$ 9.9 billion in 2Q10, 45.0% more than the US$ 6.8 billion in 1Q10.
- Operating income, as measured by adjusted EBIT (earnings before interest and taxes), of US$ 4.6 billion in 2Q10, 124.5% above 1Q10.
- Operational margin, as measured by adjusted EBIT margin, increased to 47.9% in 2Q10 from 31.2% in 1Q10.
- Cash generation, as measured by adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), rose to US$ 5.6 billion in 2Q10 - the third highest quarterly EBITDA in our history - from US$ 2.9 billion in 1Q10.
- Net earnings of US$ 3.7 billion , equal to US$ 0.70 per share on a fully diluted basis, against US$ 1.6 billion in 1Q10.
- Investments - excluding acquisitions - reached US$ 2.4 billion , with US$ 2.0 billion spent on organic growth.
- First tranche of the minimum dividend for 2010, equal to US$ 1.25 billion or US$ 0.24 per share, paid on April 30 .
- Total debt/LTM EBITDA ratio fell below 2x, reaching 1.76x.
A webcast was held today in Rio de Janeiro ( Brazil ) on Vale's performance during the second quarter of 2010, as the company reports strong operational and financial performance in the second quarter of 2010 (2Q10), the best since the global financial shock took place in 3Q08, signaling that value creation is gaining momentum. These results reflect a rising global demand for minerals and metals, operating costs under control and our efforts to increase production. 2Q10 marks the first quarter with the implementation of the new pricing regime for iron ore.
The move towards price flexibility brings more efficiency and transparency to iron ore pricing and allows the recognition of quality differences, contributing to stimulate long-term investment. In addition, clients are able to know beforehand the price to be paid in the following quarter, thus facilitating cost control and inventory management. Vale strongly believes that the continuous quest for growth will keep Vale on the road to significant shareholder value creation.
The main steps for the acquisition of Brazilian fertilizer assets were completed and one month's performance of the newly acquired assets is already captured in the 2Q10 results. Bayovar, Vale's first greenfield project in the fertilizer business, came on stream this month, on time and on budget. This was the third project to be delivered out of seven scheduled to be concluded this year.
As the many greenfield projects due to start up in the near future are delivered, the ground will be laid for the building of new growth platforms through the development of low-capex brownfield projects to meet global demand expansion, opening additional lanes to shareholder value creation.
KEY COMMENTS MADE BY VALE'S EXECUTIVES DURING THE WEBCAST
OVERALL RESULTS
"Everything is going well, the trend is very good in terms of revenue, costs and perspectives, we are very happy that we are in a very good year for Vale. We have several projects we are finalizing right now, we have been investing heavily in the last three, four years and now we are going to see some return in those investments," said Vale's CEO Roger Agnelli .
"We are in a very strong position, I should say that we are in the best moment of our history, we developed our assets, our workforce is strong and trained, ready to face day by day issues and we tackled other difficulties we might face. The scenario is very positive," completed Agnelli.
PRICING
" As far as the price system is concerned, we just came from a one year price system to a price that is established quarterly. So it was a big improvement from one system to the other… We need a system that can cope with volatility and we believe that the quarterly system can do that. We are very optimistic about the new system… We believe the quarterly pricing system will stay," said Jose Carlos Martins , Executive Officer for Strategy, Marketing and Business Development.
INVESTMENTS IN AFRICA AND SUSTAINABILITY
"We are right now investing heavily in Africa . Africa is a place that we really need to pay more attention in sustainability and social development, they need and deserve this attention and we are very pleased to be creating some opportunities for the local people. Some may say Africa is a risky continent but we understand very well the needs that they have, how we have to carry the investments there. So we don't see any problem there. We