Performance of Vale in 2008


    RIO DE JANEIRO, Feb. 20 /CNW/ -- Companhia Vale do Rio Doce (Vale)
reports a strong operational and financial performance in 2008, highlighted by
several production, sales and financial records.
    Eight production records - nickel, bauxite, alumina, copper, coal,
cobalt, platinum group metals and precious metals - were achieved while eight
products registered all-time high volumes of shipments - iron ore (264.0
million metric tons), nickel (276,000 metric tons), copper (320,000 metric
tons), alumina (4.2 million metric tons), cobalt (3,087 metric tons), precious
metals (2.4 million troy ounces), platinum group metals (411,000 troy ounces)
and coal (4.1 million metric tons). The excellence in financial performance
was reflected in the achievement of record revenues, operational profit, net
earnings, cash generation, dividend distribution, and investment supported by
a very strong balance sheet.
    In spite of the large downward volatility in mining equity prices during
the second half of 2008, Vale preserved the global leadership in shareholder
value creation amongst big diversified mining companies, with a total
shareholder return of 23.1% per year over the last five years.
    Problems with the global financial system have accelerated sharply since
September 2008, precipitating a dramatic change in the pace of macroeconomic
activity around the world. The ensuing heightened levels of uncertainty and
retrenchment in the demand for minerals and metals resulted in a more moderate
operational and financial performance in the last quarter of 2008.
    Vale has been very proactive in responding to the deterioration of the
economic environment. Production cutbacks involving primarily the shutdown of
higher-cost operational units and the implementation of new strategic
priorities are the main components of our fast reaction to the global
recession. Cost minimization, operational and financial flexibility and
reconciliation of cash preservation with the pursuit of profitable growth
options have assumed paramount importance to deal with the current scenario.
    Given our endowment of world-class low-cost assets, financial strength
and the rapid response to changing conditions, we firmly believe we are able
to weather the down cycle and create value.
    The main highlights of Vale's performance in 2008 were:
    -- Record gross revenue of US$ 38.5 billion, 16.3% more than the US$ 33.1
billion of 2007.
    -- Record operational profit, as measured by adjusted EBIT (a) (earnings
before interest and taxes) of US$ 15.7 billion, 19.0% higher than 2007.
    -- Operational margin, as measured by adjusted EBIT margin, of 41.9%,
against 40.9% in 2007.
    -- Record cash generation, as measured by adjusted EBITDA(b) (earnings
before interest, taxes, depreciation and amortization): US$ 19.0 billion in
2008, compared to US$ 15.8 billion of 2007.
    -- Record net earnings of US$ 13.2 billion, equal to US$ 2.61 per share
on a fully diluted basis, with an 11.9% increase over the 2007 figure of US$
11.8 billion.
    -- Record dividend distribution in 2008 was US$ 2.85 billion, equal to
US$ 0.56 per share, 52.0% above 2007.
    -- Record investment - excluding acquisitions - of US$ 10.2 billion
against US$ 7.6 billion in 2007.
    -- Strong financial position, supported by large cash holdings of US$
12.6 billion, availability of significant medium and long-term credit lines
and a low-risk debt portfolio.
    The net earnings figure for 2008 - US$ 13.218 billion - as well as for
4Q08 - US$ 1.367 billion - includes a non-cash extraordinary charge of US$ 950
million derived from the regular annual impairment review for goodwill.

For further information:

For further information: Roberto Castello Branco,, or Alessandra Gadelha,, or Patricia Calazans,,
or Theo Penedo,, or Marcus Thieme,, or Tacio Neto,, all of Vale,
+011-55-21-3814-4540/ Web Site:       

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