SAO PAULO (Reuters) – Brazilian miner Vale on Thursday reported a 35% drop in fourth-quarter net profit from a year earlier due to higher provisions related to its Samarco joint venture.
Vale, one of the world’s largest iron ore producers, reported net profit of $2.42 billion for the quarter ended December, while analysts polled by LSEG had expected profit of $4.15 billion.
A $1.2 billion provision related to charges stemming from the 2015 tailings dam collapse that caused a giant landslide that killed 19 people and severely polluted the Rio Doce River has hit Vale’s bottom line.
BHP, which was Vale’s partner in the Samarco joint venture that owned the dam, said last week it would book another $3.2 billion impairment charge related to the case.
Periodic adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 37% in the quarter from a year earlier to $6.33 billion, compared with analysts’ estimates of $6.32 billion.
Sales revenue rose 9.3% to $13.05 billion versus analysts’ forecast of $13.15 billion.
Vale’s gains come as succession at the company’s helm is unclear and its board of directors is divided between re-electing current CEO Eduardo Bartolomeo and choosing a new name.
(This story has been corrected to change the currency of LSEG ratings to US dollars from reals in paragraphs 5 and 6)