ON THE VALUE CREATION PATH
RIO DE JANEIRO, Brazil, Aug. 6 /PRNewswire-FirstCall/ -- Companhia Vale do
Rio Doce (Vale) in the second quarter of 2008 (2Q08) continued to report
excellent operational and financial performance, marked by record production
of nickel, pellets and coal, shipments of iron ore and pellets, gross revenue,
operational profit, cash generation and net earnings.
The excellence of Vale's performance can be seen not only when compared to
previous periods but above all in the face of the hostile environment which
prevailed over the first half of this year, involving the continued
depreciation of the US dollar, significant increases in the price of inputs,
equipment and engineering services, the fall in the price of nickel from its
historical highs in 2Q07 and several challenges faced by our operational
activities.
Vale remains on the trail of shareholder value creation, carrying out its
growth strategy with discipline and consistent with its long-term vision of
the markets.
The main highlights of performance in 2Q08 were:
-- Record shipments of iron ore and pellets: 78.858 million metric tons,
an increase of 7.9% relatively to 2Q07.
-- Record gross revenue: US$ 10.897 billion, 22.5% more than the US$ 8.899
billion of 2Q07, the previous record. Accumulated revenue for the first half
of 2008 (1H08) was US$ 18.945 billion against US$ 16.579 billion in 1H07.
-- Record operational profit, as measured by adjusted EBIT (a) (earnings
before interest and taxes): US$ 5.235 billion, was 19.5% higher than 2Q07. In
1H08 adjusted EBIT of US$ 8.150 billion increased by 15.1% relatively to 1H07.
-- Adjusted EBIT margin of 49.4%, against 50.4% in 2Q07 and 37.2% in 1Q08.
-- Record cash generation, as measured by adjusted EBITDA(b) (earnings
before interest, taxes, depreciation and amortization): US$ 6.218 billion in
2Q08, an increase of US$ 1.161 billion over the 2Q07 record of US$ 5.057
billion. In 1H08, adjusted EBITDA reached US$ 9.947 billion compared to US$
8.241 billion in 1H07.
-- Record net earnings: US$ 5.009 billion, equal to US$ 1.02 per share on
a fully diluted basis, a 22.3% increase on the 2Q07 record result of US$ 4.095
billion. In 2H08 net earnings reached US$ 7.030 billion, as against US$ 6.312
billion in 1H07.
-- Vale's credit risk was upgraded to BBB+ by Standard & Poor's, in
recognition of its ability to finance its growth plans while at the same time
maintaining a healthy balance sheet.
-- Investments in 2Q08 totaled US$ 2.312 billion, of which US$ 1.788
billion was related to organic growth and US$ 524 million to maintaining
existing operations. In 1H08 Vale invested US$ 4.007 billion as against US$
2.799 billion in 1H07.
-- Two world-class projects started up operations: Paragominas II and
Alunorte 6&7. Our refinery's expanded capacity supported by large reserves of
high quality bauxite consolidates its position as the largest alumina plant in
the world. Apart from these, four other important projects were delivered
during 1H08: Zuhai, Fazendao, Samarco III and Dalian.
-- In May the 330-wagon trains started to operate on the Carajas railroad
(EFC). This innovation offers more flexibility and increases the productivity
of our iron ore logistics operation.
-- In line with a key strategic commitment our investment in corporate
social responsibility reached US$ 302 million, of which US$ 201 million was
allocated to environmental protection and US$ 101 million to social projects.
In 1H08, these investments totaled US$ 382 million, with US$ 272 million in
environment and US$ 110 million in social action
SOURCE Companhia Vale do Rio Doce
