Vale (VALE) Reports Loss In Q2, Revenues Hit By Dam Disaster
Zacks Investment Research | Aug 01, 2019 10:20PM ET
Vale S.A. (NYSE:VALE) reported a loss of $133 million or 3 cents per share in second-quarter 2019 against the Zacks Consensus Estimate of earnings of 58 cents. This can primarily be attributed to provisions related to the Brumadinho dam rupture, and the decommissioning of Germano dam and the Renova Foundation. Notably, the company had reported a profit of $86 million or 1 cent in the prior-year quarter.
The second quarter marks consecutive quarterly loss for Vale as a result of the Brumadinho dam disaster. On Jan 25, a tailings dam at the Corrego do Feijao iron ore mine, 5.6 miles east of Brumadinho, Minas Gerais, Brazil, operated by Vale collapsed and killed around 300 people in Brazil's deadliest mining disaster ever. Vale remains focused on reparation of damages caused to the families, infrastructure, communities and environment.
In the second quarter, Vale recorded a total provision of $1.374 billion which includes environmental measures and related agreements ($1.190 billion), the decommissioning or de-characterization of other structures not considered in the first quarter of 2019 ($98 million) and revision of the provision related to the Framework Agreements, including the compensation for collective moral damages ($86 million). In addition, the company also recorded $158 million of ongoing reparation expenses related to the Brumadinho dam rupture.
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