High iron ore prices boost operating performance, Vale S.A. Sponsored ADR (VALE.US) will distribute special dividends.

Brazilian iron ore giant Vale S.A. Sponsored ADR (VALE.US) announced that, benefiting from strong operational performance and high iron ore prices this year, it will pay a special dividend to shareholders. According to a statement released on Thursday, the company's board approved the payment of a special dividend of 3.58 Brazilian reais per share in January and March next year. The total distribution amount of 15.3 billion reais (approximately 2.9 billion US dollars) will roughly equivalent to the company's net profit in the third quarter. Marcelo Bacci, Chief Financial Officer of Vale S.A. Sponsored ADR, revealed to investors in late October that, given that iron ore prices have been consistently above $100 per ton, Vale S.A. Sponsored ADR is likely to announce a special dividend. He stated during the quarterly earnings call that the operational performance is creating a very favorable cash flow situation, which is better than expected at the beginning of the year. The financial report shows that Vale S.A. Sponsored ADR's Q3 revenue increased by 9% year-on-year to $10.42 billion, better than analysts' general expectation of $10.33 billion. Net profit attributable to shareholders was $2.744 billion, an increase of 78% year-on-year, surpassing analysts' general expectation of $2.1 billion. Pro Forma Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was $4.399 billion, a 17% increase year-on-year; adjusted EBITDA was $4.369 billion, a 21% increase year-on-year, mainly due to increased sales volumes and improved cost efficiency. By division, the iron ore division had revenue of $8.423 billion, with adjusted EBITDA of $3.972 billion; the energy transition metals division had revenue of $1.997 billion, with adjusted EBITDA of $687 million. CEO Gustavo Pimenta stated, "Iron ore production reached the highest quarterly level since 2018, while copper achieved its best performance in the third quarter since 2019, and we continue to improve cost competitiveness in nickel." Vale S.A. Sponsored ADR expects that by 2025, the integrated copper cost will be between $1,000 and $1,500 per ton, lower than the previous estimate of $1,500 to $2,000; and the integrated nickel cost will be between $13,000 and $14,000 per ton, lower than the previous estimate of $14,000 to $15,500.