February 20, 2020 / 11:42 PM / a month ago

UPDATE 1-Brazil's Vale reports surprise loss amid base metal issues

(Adds details throughout on net income, EBITDA and operating revenue)

RIO DE JANEIRO, Feb 20 (Reuters) - Brazilian iron ore miner Vale SA severely missed quarterly profit and margin estimates on Thursday, largely due to impairments related to its base metal and coal operations and the lingering effects of a deadly dam burst in January 2019.

Excluding one-time factors, the company would have largely met expectations.

As a whole, the results showed a company still reeling from the Brumadinho disaster and struggling to realize the potential of certain deposits, but which has also managed to limit the apparent effects of the dam burst on output, pleasing some analysts.

In a securities filing, the company reported a $1.56 billion net loss in the fourth quarter. A Refinitiv poll of analysts had predicted a net profit of $2.61 billion.

That miss was largely due to a $2.51 billion impairment at its nickel mine in New Caledonia, where Vale has revised down expected production levels due to “challenging issues” related to “production and processing.”

Vale also recognized a $1.69 billion charge at a coal mine in Mozambique for similar reasons and a previously announced $671 million charge to “decharacterize” some dams similar to the one that burst last year.

Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for some one-off items, totaled $3.53 billion, also below the Refinitiv consensus estimate of $4.4 billion. Vale said EBITDA was hit by about $900 million in Brumadinho-related provisions.

Net operating revenue fell to $9.96 billion from $10.2 billion in the third quarter, but still beat the Refinitiv estimate of $9.61 billion, partly due to strong sales of certain metals such as copper and gold. (Reporting by Gram Slattery and Marta Nogueira; Editing by Sandra Maler and Richard Chang)

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