Vale has a profit of US$22.885 billion in 2011

Vale S.A. (Vale) had a strong performance in 2011, characterized by record operational incomes (US$60.4 billion), operational profit (US$30.1 billion), operational margin (48.5%), cash flow (US$35.3 billion) and net profit (US$22.9 billion). Both iron ore and pellets reached a historical record, with almost 300 million tons (Mt), while nickel and copper sales had their best index in a year since 2008.

For the Chairman of Vale, Ricardo Flores, in 2011, the return to shareholders reached the new record amount of US$12 billion, which proves that Vale is a Company with excellent performance and huge potential. I truly believe that the Company will continue to be committed to the long-term value creation and with the sustainable development of the communities where it acts and the sustainable development of the Country.

Murilo Ferreira, CEO of Vale, said: Our financial performance was outstanding, the best of all times. We broke several records in spite of a challenging economic environment. The discipline for executing our strategy and the operation performance were essential to enable us benefit from the strong global demand for ore and metals.

The Management Board approved the reorganization of the Executive Board aiming at encouraging the best interaction between corporate activities and the business units, encouraging team work. It was created a division responsible for implementing the projects, headed by an Executive Director; it was created with focus on improving the quality of the projects executed.

Five new projects were delivered in 2011 – Onça Puma, Omã, Moatize, Estreito and Karebbe – which are still in ramp-up phase, with potential growth and added value to be reached in 2012 and 2013. Both growth and added value dynamic shall be supported in the next years by the delivery of world class projects, under construction, of iron ore, pellets, coal, copper, nickel and potassium, currently under construction.

The operation license of N5 South area, located at Serra Norte complex, in Carajás, was the first operation license in Carajás obtained since 2002. This license allows us to explore the rich deposit of iron ore with the highest amount of iron, which contributes to keep the high quality of our production.

In order to explore synergies to and enable a total exposition of Vale’s shareholders to the added value potential for fertilizer business, the Company canceled the registry as a Vale Fertilizantes subsidiary after the business trading for the participation of minority shareholders. The quest for synergy opportunities and rationalization of the assets’ portfolio is one of our permanent targets.

Vale had its credit rating raised by Standard & Poor’s (S&P) from BBB+ to A-. According to S&P’s risk rating, the A rating means a strong capacity to meet financial commitments. This update reflects the strong cash flow, solid balance and permanent focus on decreasing capital costs.

Aligned with the focus on people and the importance of human life, the Company is enhancing its occupational safety standards, regardless of Vale showing one of the best indexes of occupational safety in ore industry. Expenses with corporate social responsibility were of US$1.5 billion, being US$1.0 billion for environmental protection and maintenance, and US$457 million in social projects.

The results of 4QY11 were solid, but inferior to 3QY11 because the prices were lower due to the fact Europe was in recession and due to negative expectations produced by the Eurozone debt crisis.

The major highlights of Vale’s performance were:

• Record operational income of US$60.389 billion in 2011, 29.9% higher than last year’s record of US$46.481 billion. In 4QY11, the operational income was US$14.755 billion.

• Record operational profit of the current operations, measured by adjusted EBIT (profit before interests and taxes), except for non-recurrent gains, of US$28.599 billion. In 4QY11, the operational profit was US$6.023 billion.

• Record operational profit margin of current operations, measured by adjusted EBIT margin of 48.5% in 2011. In 4QY11, EBIT margin was 41.7%.

• Record net profit of US$22.885 billion in 2011, equivalent to US$4.36 per diluted share. Net profit was US$4.672 billion in 4QY11, and US$0.90 per diluted share.

• Generation of record current operation cash flow, measured by adjusted EBITDA (profit before interests, taxes, depreciation and amortization), except for non-recurrent gains, of US$33.759 billion¹. In 4QY11, the adjusted EBITDA was US$7.396 billion.

• Record sale of iron ore and pellets, 299,1 Mt, showing an increase of 1.6% over 2010.

• Record investments, except acquires of US$18.0 billion in 2011, to which US$13.4 billion were spent with the project’s execution and research and development (R&D).

• The return of capital to shareholders reached the record amount of US$12 billion, composed by dividends’ distribution of US$9 billion, equivalent to US$1.7354 per ordinary or preferential share, and by the reward program for repurchase of US$3billion shares fully executed. For 2012, we announced a minimum dividend of US$6 billion.

• Solid balance with low leverage, measured by total debt/LTM EBITDA adjusted, equals to 0.66 xs, and the average long-term maintenance of the debt, of 9.8 years.

Fonte: Vale