GMT EIGHT - Financial Report

Vipshop Holdings Ltd Sponsored ADR (VIPS.US) reported better-than-expected Q4 performance, causing the stock price to rise in pre-market trading.

Vipshop Holdings Ltd Sponsored ADR (VIPS.US) announced its fourth quarter and full year performance for 2024 on Friday. The data shows that the company's Q4 net revenue was 33.2 billion yuan (approximately 4.6 billion US dollars), surpassing market expectations, compared to 34.7 billion yuan in the same period last year; diluted earnings per ADS were 4.69 yuan (0.64 US dollars), also surpassing market expectations. The fourth quarter GMV (Gross Merchandise Volume) was 66.2 billion yuan, compared to 66.4 billion yuan in the same period last year. The full year GMV for 2024 increased by 0.6% year-on-year to 209.3 billion yuan. The number of active users in the fourth quarter was 45.7 million, compared to 48.5 million in the same period last year. The total number of active customers for the full year of 2024 was 84.7 million, compared to 87.4 million in the previous year. The total number of orders in the fourth quarter was 217.5 million, compared to 234.3 million in the same period last year. The total orders for the full year of 2024 were 757.5 million, compared to 812.3 million in the previous year. Looking ahead, Vipshop Holdings Ltd Sponsored ADR expects its net revenue for the first quarter of 2025 to be between 26.3 billion and 27.6 billion yuan, a year-on-year decrease of approximately 5% to 0%. As of the time of publication, Vipshop Holdings Ltd Sponsored ADR's stock price rose by 10.12% in pre-market trading, to 16.00 US dollars.

21/02/2025

Luckin Coffee, Inc. Sponsored ADR Class A (LKNCY.US) fourth quarter 2024 financial report conference call: Store-level operating profit margins have increased to 19.6%, optimistic about future SSSG growth.

Recently, Luckin Coffee, Inc. Sponsored ADR Class A (LKNCY.US) held its fourth quarter 2024 earnings conference call. Senior management of Luckin Coffee stated that, thanks to the continued expansion of its store network and growth in monthly transaction customers, total revenue in the fourth quarter increased by 36% year-on-year to 9.6 billion yuan. The improvement in same-store sales growth was significant, with a 6.1 percentage point increase in store-level operating profit margin to 19.6% year-on-year, reflecting improved operational efficiency and a more balanced operational pace between store growth and customer growth. Looking ahead to 2025, the company stated that it will continue to strengthen and expand its leading position in the industry. Economies of scale, cost, and efficiency advantages will become more apparent, and there is confidence in further improving same-store sales growth (SSSG) performance. In the short term, the company will utilize its extensive store network to attract more customers through product innovation, category expansion, and effective marketing activities to increase sales performance at each store. In the medium to long term, coffee consumption in China is still in the early stages. With the development of coffee consumption habits, the frequency of coffee consumption will naturally increase, and there is a significant growth potential in per capita coffee consumption, which will be the driving force for future SSSG growth. Furthermore, Luckin Coffee stated that the rise in coffee bean prices may have a certain negative impact on cost projections in 2025, but the company expects to partially mitigate this impact through improved operational efficiency and economies of scale. Additionally, due to the enhancement of economies of scale, the cost per delivery has decreased. Q&A Q: Can same-store sales growth (SSSG) be broken down into price and volume factors? What is management's view on same-store sales growth for 2025? A: Overall, the fluctuations in SSSG over the past few quarters have been as expected, and the continued improvement in the fourth quarter is consistent with what the company has communicated to the market. Since 2023, the Chinese coffee market has been growing rapidly, but competition has also intensified. The company strategically accelerated its pace of store expansion to gain market share. As stores take time to mature and customer consumption habits take time to develop, SSSG has experienced short-term fluctuations, which align with strategic judgment and expectations. Looking ahead to 2025, the company will continue to strengthen and expand its leading position in the industry. Economies of scale, cost, and efficiency advantages will become more apparent, and there is confidence in further improving SSSG performance. In the short term, the company will utilize its extensive store network to attract more customers through product innovation, category expansion, and effective marketing activities to increase sales performance at each store. In the medium to long term, coffee consumption in China is still in the early stages. With the development of coffee consumption habits, the frequency of coffee consumption will naturally increase, and there is significant growth potential in per capita coffee consumption, which will be the driving force for future SSSG growth. The continued improvement in same-store sales growth in the fourth quarter benefited from the strong execution of the store expansion strategy. In terms of pricing, prices in the fourth quarter remained stable compared to the same period in 2023; in terms of cup sales volume, the growth in customer demand drove the sustained improvement in cup sales performance, with daily average cup sales per store in December 2024 exceeding December 2023, leading to positive growth in same-store sales for that month. Looking ahead, prices are expected to remain stable compared to last year, and with more self-operated stores maturing, and with more choices for high-quality coffee and attractive coffee experiences, the daily average cup sales per store are expected to steadily increase year by year, further driving improvements in overall same-store sales performance. Q: The recent sharp increase in coffee bean prices, how should its impact on the company be evaluated? What measures will the company take to address this issue, and will it consider raising prices to mitigate the impact? A: The sharp increase in coffee bean prices has indeed attracted widespread attention in the coffee industry and market, bringing about certain cost pressures, but the company expects to partly alleviate this impact through a strong supply chain and competitive advantages established through investments in the full value chain. The company's scale advantage and efficiency improvements can buffer this pressure, and currently, the impact of the rise in coffee bean prices is largely manageable. The company has been investing in the value chain of the coffee industry, establishing a full value chain covering procurement from production areas, import and export, processing, and retail operations. In November last year, the company deepened cooperation with Apex Brazil, signing a new memorandum of understanding to purchase 240,000 tons of coffee beans over the next 5 years, providing a stable supply of high-quality coffee beans for the company. With the benefit of its own roasting facilities, it is expected that by the end of this year, the company's annual roasting capacity will reach 100,000 tons, providing a stable and cost-effective supply of coffee beans. Currently, the company has no plans to raise prices and will continue to offer coffee promotions to customers, cultivate coffee consumption habits, and allow more customers to enjoy high-quality coffee experiences at competitive prices. As an industry leader, the company will work together with upstream and downstream partners to pass on the positive impact of the rise in coffee bean prices, promote sustainable coffee trade, and drive the long-term success and healthy development of the entire industry.

21/02/2025

Latin American e-commerce platform MercadoLibre (MELI.US) reported a 37% sales growth in Q4, exceeding expectations. The number of buyers has exceeded 100 million for the first time.

Latin American e-commerce platform MercadoLibre (MELI.US) exceeded expectations in the fourth quarter. The financial report shows that all indicators, including active buyers, total merchandise transactions, and payment volumes, grew, leading to a 37.4% increase in total sales. According to the financial report, MercadoLibre's fourth-quarter sales were $6.06 billion, a 37.4% year-on-year increase, surpassing market expectations by $120 million; earnings per share were $12.61, significantly exceeding expectations of $5.05. The total payment volume reached $58.9 billion, a 33% year-on-year increase; GMV grew by 8%, excluding the effects of foreign exchange, it grew by 56% year-on-year. In a statement, the company said, "Mercado Libre had another fruitful year in 2024, with more consumers and merchants choosing us, allowing us to achieve the milestone of over 1 billion annual active buyers and 60 million fintech monthly active users for the first time." MercadoLibre ("Free Market") is an Argentine e-commerce and payment platform registered in Delaware and traded on the Nasdaq market. The company was founded 25 years ago by CEO Marcos Galperin during the heyday of the internet bubble. According to eMarketer data, the company currently dominates online sales in Brazil, Argentina, Mexico, and Chile, accounting for about half of online sales in South America. It also operates a digital payment platform called Mercado Pago.

21/02/2025

Booking (BKNG.US) holiday season performance exceeds expectations across the board! Strong resilience in travel demand, room bookings surged by 13%.

After the busy holiday season, the world's largest online travel website Booking (BKNG.US) reported better-than-expected performance in the fourth quarter. The financial report shows that Booking's fourth quarter revenue was $5.5 billion, an increase of 15.1% year-on-year, exceeding expectations by $320 million; non-GAAP earnings per share were $41.55, higher than the expected $5.46. The company stated that in the three months ending on December 31, room nights booked increased by 13% to 261 million, surpassing Wall Street's expectations and its own growth forecast range of 6% to 8%. The total travel bookings, including taxes and fees, amounted to $37.2 billion, compared to the expected $34.5 billion. Through "strict cost management methods," Booking reduced operating expenses by 10%, and adjusted EBITDA increased by 26% to $1.8 billion, exceeding the expected $1.65 billion. Additionally, Booking announced the approval of an additional $20 billion stock buyback plan. The company also distributed a cash dividend of $9.60 per share, to be paid on March 31. After announcing the performance, dividend, and stock buyback plan, the company's stock price rose by 3.8% in after-hours trading. Booking's latest performance indicates that despite the gradual fading of the tourism boom after the pandemic last summer, travel demand remains strong. Previously, online travel competitors Airbnb Inc. and Expedia Group Inc. also issued similar optimistic comments, with both companies reporting better-than-expected holiday season performance. In October last year, Booking raised its full-year performance forecast for 2024, citing strong performance in Europe and growth in Asia. While there are signs of a strong development in holiday travel peak season, Airbnb and Expedia have given disappointing revenue and booking volume expectations, citing adverse effects of a strong dollar. Evercore ISI analysts warned in a research report on Tuesday that Booking's outlook may also be impacted by exchange rate fluctuations. According to data compiled by Bloomberg, the company is particularly affected by unfavorable exchange rates, as about 90% of its revenue comes from outside the United States.

21/02/2025

Gold production and prices doubled, Newman Mining (NEM.US) Q4 profits far exceeded expectations.

On Thursday, the world's largest gold producer, Newmont Mining (NEM.US), announced fourth-quarter earnings that exceeded expectations, thanks primarily to the continuous rise in gold prices and an increase in the company's gold production. Data showed that for the quarter ending on December 31, adjusted earnings per share were $1.40, far exceeding the analyst's average forecast of $1.08. Over the past few quarters, the average price of gold has continued to climb, reaching historic highs multiple times between October and December last year. This uptrend was mainly driven by uncertainty surrounding the U.S. presidential elections and tensions in the Middle East, which increased demand for safe-haven assets in the market. Newmont Mining's gold production in the fourth quarter increased by 9.2% year over year, reaching 1.9 million ounces, while the gold sales price increased by 31.9% year over year to $2,643 per ounce. Additionally, the industry indicator reflecting total production costs for gold - all-in sustaining costs (AISC) decreased by 1.5% year over year to $1,463 per ounce, providing strong support for the company's profits. Looking ahead, Newmont Mining expects gold production for this year to reach approximately 5.9 million ounces, exceeding Wall Street analysts' forecast of 5.87 million ounces. After completing the acquisition of Australian company Newcrest for $17.14 billion, Newmont Mining announced in February 2024 that it will divest non-core assets and reduce its workforce to reduce debt. As of December 31, the company's debt stood at $5.31 billion. At the end of last year, Newmont Mining announced the sale of its Eleonore mine in Canada for $795 million to British mining company Dhilmar Ltd, and the sale of its Musselwhite gold mine in Ontario for $850 million to Orla Mining (ORLA.US). Last month, gold miner Discovery Silver announced its intention to acquire Newmont Mining's stake in the Porcupine Operations project in Ontario, Canada for $425 million.

21/02/2025

Walmart Inc. (WMT.US) stock price plunges after earnings report! Q4 earnings exceed expectations but profit guidance for the 2026 fiscal year is disappointing.

Despite the fact that retail giant Walmart Inc.'s performance in the fourth quarter of the 2025 fiscal year exceeded expectations, the profit guidance provided by the company for the 2026 fiscal year was disappointing, indicating that the uncertain economic environment is impacting the company. As a result of this news, as of the time of writing, Walmart Inc. shares fell more than 8% in pre-market trading on Thursday. The financial report showed that Walmart Inc.'s Q4 revenue was $180.554 billion, a 4.1% year-over-year increase, beating analysts' average expectation of $180 billion. Net sales were $178.83 billion, a 4.0% year-over-year increase; membership and other revenue were $1.724 billion, a 17.0% increase. Benefiting from increased membership revenue and improvements in the e-commerce business, operating profit was $7.859 billion, an 8.3% year-over-year increase; adjusted earnings per share were $0.66, slightly better than analysts' average expectation of $0.65. By region, net sales in the U.S. were $123.5 billion, a 5.0% year-over-year increase; store sales (excluding fuel) increased by 4.6%, compared to 4.0% in the same period last year. Net sales in the international region were $32.2 billion, a 0.7% year-over-year decrease. In addition, net sales at Sam's Club in the U.S. were $23.1 billion, a 5.7% year-over-year increase; store sales (excluding fuel) increased by 6.8%, compared to 3.1% in the same period last year. Walmart Inc. stated that global e-commerce sales increased by 16%, driven mainly by in-store pickup and the U.S. market; global advertising business grew by 29%, with Walmart Connect in the U.S. growing by 24%. The company said that its e-commerce business is helping to attract and retain more consumers, including high-income consumers attracted by the convenience of in-store pickup and delivery services. The company's e-commerce business is also expanding its product offerings, including items that cannot be found in stores, such as collectibles and second-hand Chanel handbags. Walmart Inc. is the first major retailer to report earnings after the holiday shopping season. Data from the National Retail Federation shows that as consumers search for bargains, the rate of growth in holiday season sales in 2024 was slightly higher than a year ago. Walmart Inc. CFO John David Rainey said, "I think consumers are stable." "General merchandise sales are improving, and holiday season demand is in line with the company's expectations." However, Walmart Inc.'s latest performance guidance was disappointing. Walmart Inc. expects adjusted earnings per share of $2.50 to $2.60 for the 2026 fiscal year, below the market's expected $2.77; it expects adjusted earnings per share of $0.57 to $0.58 for the first quarter of the 2026 fiscal year, also below the market's expected $0.65. Despite Walmart Inc.'s historically conservative performance guidance, with the stock price rising 77% over the past 12 months, investors' expectations have become very high. For Walmart Inc., the impact of the tariffs implemented by U.S. President Trump remains a big question mark. John David Rainey pointed out that given the unpredictability of tariffs, the current guidance does not include the potential impact of tariffs. He said the company will work with suppliers and lean towards own brands to maintain low prices.

20/02/2025

Teck Resources (TECK.US) Q4 profits exceed expectations, with copper production increasing by 19% year-on-year.

Thanks to an increase in copper production in Chile, Canadian mining company Teck Resources (TECK.US) reported fourth-quarter profits on Thursday that exceeded market expectations. Data shows that Teck Resources' adjusted earnings per share for the fourth quarter were 0.45 Canadian dollars (equivalent to 0.3168 US dollars), while analysts' average expectations were for 0.43 Canadian dollars per share. Total copper production in the fourth quarter reached 122,100 metric tons, a 19% increase year-on-year, with 60,700 metric tons coming from the Quebrada Blanca copper mine in Chile. Teck Resources CEO Jonathan Price stated, "Due to the strong performance of the Quebrada Blanca mine, our copper production in the fourth quarter set a new quarterly record." Strong sales and favorable prices also provided support. The company has been investing in a bottlenecking project at the Quebrada Blanca copper mine, with expectations that this will further increase capacity by 10-15%. Teck expects copper production to be between 490,000 and 565,000 metric tons by 2025. As of the time of writing, Teck Resources' pre-market stock price rose by 0.68%.

20/02/2025

Car finance case clouds Lloyds (LYG.US) Q4 profit below expectations.

Lloyds (LYG.US) has set aside an additional 700 million ($882 million) to cover potential regulatory investigation costs for its car finance business, leading to lower-than-expected fourth-quarter profits for the bank. Data shows that Lloyds' pre-tax profit in the fourth quarter was 824 million, below analysts' average expectation of 1.03 billion. Despite taking provisions, Lloyds Banking Group plc Sponsored ADR said it remains committed to delivering returns for shareholders and announced a 1.7 billion buyback plan, along with a 15% increase in dividends. Lloyds' stock price rose 3.82% in pre-market trading in the US. Lloyds is the UK's largest car loan provider and had previously set aside 450 million to cover potential compensation and other related costs. The Financial Conduct Authority in the UK is investigating whether car loan borrowers have been charged excessive fees. The UK Supreme Court will hear the case in April, with regulatory actions expected to be announced in May. Lloyds CEO Charlie Nunn said, "Clearly, there remains significant uncertainty around the ultimate financial impact. In this context, we welcome the Supreme Court expediting the process." Bank of America Corp analysts recently estimated that the UK banking sector could face costs of up to 38 billion related to the issue. Lloyds Banking Group plc Sponsored ADR may have to bear losses of 3 billion. Currently, the bank has set aside a total of 1.15 billion. Earlier this week, Lloyds Banking Group plc Sponsored ADR's stock price fell after a court rejected the UK Treasury's defense in the high-profile case. Nunn said the government's intervention was a "strong statement of intent," and the court's decision had no impact on Lloyds' provisions. Nunn has led a three-year overhaul of Lloyds, focusing on affluent clients and interest rate-independent services. Lloyds Banking Group plc Sponsored ADR is also adjusting staffing in technology and other areas to support the shift to digital banking and cut costs. Lloyds CFO William Chalmers said the bank expects economic growth to "slow down" this year, but customers are still expected to continue repaying loans. Lloyds Banking Group plc Sponsored ADR set aside 431 million in bad debt provisions for 2024, higher than the previous year but below analysts' expectations.

20/02/2025

Youdao Inc ADR Class A (DAO.US) expects to exceed market expectations in full-year profit in 2024, with the launch of the innovative DeepSeek AI question and answer pen in a new category.

On February 20, Netease Inc Sponsored ADR Youdao Inc ADR Class A (DAO.US) announced the unaudited financial report for the fourth quarter and full year of 2024. During the reporting period, under the "AI+ Education" strategy, Youdao Inc ADR Class A continued to drive product and service upgrades, achieved a breakthrough in AI commercialization, and significantly improved its business profitability. The financial report shows that in the fourth quarter of 2024, Youdao Inc ADR Class A achieved operating profit of 84.2 million yuan, an increase of 10.3% year-on-year; operating cash flow reached 160 million yuan. In the full year of 2024, Youdao Inc ADR Class A achieved record highs in profitability and cash flow performance. The net income reached 5.63 billion yuan, a year-on-year increase of 4.4%; operating profit reached 150 million yuan, achieving annual profitability for the first time; operating cash flow net outflow narrowed by 84.5% year-on-year. CEO of Netease Inc Sponsored ADR Youdao Inc ADR Class A, Zhou Feng, stated, "In 2024, we successfully combined the rapid advancement of generative AI with profitability goals. It was a groundbreaking year, as we not only achieved annual profitability for the first time, but also saw several businesses emerge as leaders in their respective fields." Focused strategy drives growth, improves main business profitability In 2024, Youdao Inc ADR Class A adhered to the strategy of "AI+ Education" with dual-wheel drive and focused strategy, using AI empowerment to build long-term competitiveness in core businesses. In the learning services sector, Youdao Inc ADR Class A focused on high-growth businesses such as Ling Shi, using AI technology to enhance personalized teaching capabilities. In the fourth quarter of 2024, net revenue from learning services for Youdao Inc ADR Class A reached 620 million yuan, net revenue from digital content services reached 390 million yuan, covering costs and operating expenses, and generating substantial profits. Through the Ling Shi platform, Youdao Inc ADR Class A achieved a sales growth of over 10% year-on-year in the fourth quarter, with a renewal rate of over 70%; the Little Turing platform focused on information technology programming, driving a sales growth of over 20% year-on-year in the fourth quarter, with a renewal rate of over 70%. Additionally, the AI subscription services of Youdao Inc ADR Class A also showed strong growth, with sales increasing by over 50% year-on-year for eight consecutive quarters. In the full year of 2024, AI subscription service sales exceeded 200 million yuan, growing by over 130% year-on-year. In the fourth quarter, net revenue from online marketing services for Youdao Inc ADR Class A reached 480 million yuan, a 1.6% year-on-year increase, with a gross profit margin of 34.2%, becoming an important profit growth sector. This growth was mainly due to the continuous expansion of Youdao Inc ADR Class A's advertising in new fields and the ongoing optimization of advertising effectiveness through AI technology. In the fourth quarter, leveraging the advertising big model, Youdao Inc ADR Class A drove a record high in domestic performance advertising revenue in the gaming and AI tool industries; for overseas advertising, Youdao Ads also established an official partnership with Alphabet Inc. Class C, laying a solid foundation for the development of overseas advertising business. Furthermore, Youdao Inc ADR Class A continued to invest in overseas KOL marketing. Combining the big model and image recognition technology, Youdao Inc ADR Class A developed a new algorithm model for assessing the conversion effects of influencer marketing videos. For example, in the global promotion of the game "Marvel Contest of Champions", Youdao Inc ADR Class A provided full-cycle influencer marketing services, leading to the release of nearly 200 pieces of KOL content and helping the game reach the top of the global bestseller list on the day of its launch on Steam. The rapid development of AI technology has brought new growth opportunities to the smart hardware market. During the reporting period, Youdao Inc ADR Class A achieved steady growth in performance through focusing on key products. In the fourth quarter, net revenue from smart hardware business for Youdao Inc ADR Class A reached 240 million yuan, an 8.1% increase year-on-year, with net revenue from dictionary pens growing by approximately 20% year-on-year. As the pioneer and industry leader in the dictionary pen category, Youdao Inc ADR Class A's dictionary pens have demonstrated strong capabilities and wide user influence in the field of AI education. Since its launch, the cumulative sales of dictionary pens have exceeded 10 million units, successfully setting a new record in the learning hardware market. Empowering AI education innovation with reasoning models, commercialization promoting product enhancement Since 2023, based on the Confucius Education big model, Youdao Inc ADR Class A has continued to upgrade AI technology, exploring the innovative application of educational AI, and enhancing product competitiveness. During the reporting period, Youdao Inc ADR Class A launched the first domestically outputting step-by-step explanation reasoning model, "Confucius-o1", and made it open-source. As a 14B lightweight model, it supports deployment on consumer-grade graphics cards and provides detailed problem-solving processes through reasoning chain technology. With powerful logic and reasoning capabilities, "Confucius-o1" achieves higher accuracy in problem-solving and supports Chinese logic reasoning functions. Currently, "Confucius-o1" has been applied to the AI all-subject learning assistant Youdao Inc ADR Class A Xiao P and has achieved.Positive feedback from users. It is reported that the total number of users who have used Youdao Inc ADR Class A Xiao P since its launch has exceeded 100 million times.Under the wave of AI transformation sparked by DeepSeek, Youdao Inc ADR Class A quickly responded and fully integrated. In the past few weeks, Youdao Inc ADR Class A has used the deep reasoning capabilities of DeepSeek-R1 to upgrade and optimize multiple products - Youdao Inc ADR Class A's XiaoP has further optimized personalized question-and-answer functions, providing more in-depth and accurate problem-solving strategies; Youdao Inc ADR Class A's dictionary and translation have brought a new upgrade to translation and productivity experiences; Hi Echo has achieved the market's first voice version of Deepseek, providing a richer and more open spoken dialogue practice experience; Youdao Inc ADR Class A's Zhiyun has been upgraded after fully integrating DeepSeek, QAnything and intelligent voice services. In addition, Youdao Inc ADR Class A has further applied reasoning model technology to educational hardware products. Recently, Youdao Inc ADR Class A innovatively launched the new category AI answer pen SpaceOne, which deeply integrates the reasoning model capabilities of DeepSeek-R1, combining AI capabilities with educational scenarios and knowledge base advantages to unlock a new way of explaining difficult subjects in depth, providing users with more intelligent and convenient learning solutions. By integrating the Sun Yat-sen model and DeepSeek-R1 into many products, Youdao Inc ADR Class A has achieved a deep integration of the two. With the outstanding reasoning abilities of DeepSeek-R1 and the deep cultivation of the Sun Yat-sen model in the field of education, Youdao Inc ADR Class A has significantly enhanced the functions of existing products, optimized user experience, and provided services to users faster and with higher cost-effectiveness. "Looking ahead to 2025, the rapid development of DeepSeek is reshaping the landscape of the Chinese technology industry. In the past few weeks, we have integrated DeepSeek in applications, courses, advertising, and hardware, but this is just the beginning. We will push forward the 'AI native' strategy with a firmer attitude, fully deepen the integration of AI with various business lines; at the same time, the acceleration of reasoning model maturity is exciting, and we look forward to landing more innovative products to create value for users." Zhou Feng said.

20/02/2025

Impairment has dragged down performance. Vale S.A. Sponsored ADR (VALE.US) continues to spend heavily on share repurchases and dividends.

Brazilian mining company Vale S.A. Sponsored ADR (VALE.US) reported a fourth-quarter loss of 6.94 billion US dollars, significantly lower than market expectations and in stark contrast to the huge profit in the same period last year, due to impairment charges on its Canadian base metals assets. However, as one of the world's largest iron ore producers, Vale S.A. Sponsored ADR also announced a new round of return plan to shareholders through dividends and stock repurchases, which has been positively evaluated by analysts. In addition, the company has also reduced its planned spending budget for this year. Data shows that the company's quarterly net loss was much lower than the analysts' expected net profit of 1.95 billion US dollars, and also lower than the net profit of 2.4 billion US dollars in the same period last year. The loss was mainly attributed to a $1.4 billion impairment charge on the Canadian Thompson nickel business and a $540 million impairment charge on the expansion project of the Canadian Voisey's Bay mine. Vale S.A. Sponsored ADR stated that the impairment was made after evaluating its base metals business assets. The company announced last month that it had begun a "strategic evaluation" of its Thompson nickel assets, including the possibility of selling them. Vale S.A. Sponsored ADR's adjusted EBITDA core profit for the quarter was 3.79 billion US dollars, a 41% decrease compared to the previous year, lower than the analysts' expected 3.96 billion US dollars. Excluding impairment and one-time items, Vale S.A. Sponsored ADR's net profit for the quarter could reach 872 million US dollars, but still decreased by 64% compared to the same period last year due to lower iron ore prices and sales volume. Vale S.A. Sponsored ADR announced a dividend of approximately 2.14 Brazilian reais per share and plans to repurchase up to 120 million shares in the next 18 months, representing 3% of its equity base. Analysts from Banco Santander S.A. Sponsored ADR affirmed this "solid performance" and mentioned that the operational data did not include the impact of impairments and other one-time items. In their report to clients, they wrote, "Given the stronger-than-expected shareholder return and the new buyback program, we expect the market to react positively." Itau BBA analysts also anticipate a positive market response and noted that one-fourth of the announced dividend is a special dividend. Vale S.A. Sponsored ADR's production and sales report released last month showed that iron ore production in the fourth quarter decreased by nearly 5% compared to the same period last year, as the company prioritized the production of higher-profit products. Nonetheless, the company's full-year production in 2023 is still expected to reach a new high since 2018. In another document on Wednesday, Vale S.A. Sponsored ADR reduced its estimated capital expenditure for this year from approximately 6.5 billion US dollars to around 5.9 billion US dollars, mainly due to a reduction in planned investments in the energy transition metals of CKH HOLDINGS.

20/02/2025

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