April 25, 2018 / 11:33 PM / 25 days ago

UPDATE 2-Brazil's Vale 1st-qtr profit slumps by a third on price slide

(Adds record sales, iron ore price slide)

RIO DE JANEIRO, April 25 (Reuters) - Vale SA, the world’s largest iron ore producer, posted a 36 percent slump in first-quarter profit compared to the same quarter a year earlier, missing estimates, as iron ore prices slipped despite record sales, results showed Wednesday.

In a securities filing, Brazil’s Vale said quarterly net income totaled $1.59 billion, below a consensus estimate of $1.926 billion and the $2.49 billion reached a year ago.

Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, slumped to $3.971 billion, below a consensus estimate of $4.387 billion compiled by Thomson Reuters and the $4.308 billion posted in the year-ago quarter.

The company said iron ore prices fell 12.4 percent in the first quarter compared to the same period last year to $66.41 per tonne, while costs and expenses rose by nearly 10 percent.

However, sales of iron ore fines rose 11.2 percent to 70.8 million tonnes, a record for the first quarter.

Vale slashed net debt to $14.9 billion in the quarter from more than $18 billion at the close of 2017, taking it to the lowest level in nearly seven years. The company promised to lower its debt to $10 billion in the “short term,” after saying in January it hoped to reach that target by mid-2018.

Capital expenditure slid to $890 million in the first three months of the year, the smallest such outlay for a first quarter since 2005, Vale said.

Net operating revenue rose just 1 percent to $8.603 billion from the first quarter of last year, but was below analysts’ expectations of $8.698 billion.

Earlier this month, Vale said total iron ore output slipped in the first quarter due to heavy rains, but kept its output goal for the year on hold at 390 million tonnes. (Reporting by Marta Nogueira and Alexandra Alper, editing by Grant McCool and Richard Pullin)

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