Financial Results 4Q22 and 2022
Financial Results 4Q22 and 2022
“In 2022, we made significant progress on our strategic priorities. In safety, we are proud to have eliminated 40% of our upstream structures and removed the B3/B4 dam from the high-risk level. In Iron Solutions, we advanced on our path to becoming the supplier of choice for high-quality products, leveraging Vale’s unique mineral endowment and capitalizing on the decarbonization trend of the steel industry. On that, we have announced hubs to develop green solutions in the Middle East and secured MoUs with clients representing around 50% of the our scope 3 emissions, expanding the offer of low-carbon products such as high-grade pellets and briquettes. On operations, we took concrete actions to deliver on our long-term growth guidance by advancing on the critical milestones we had laid out for the year. In the Southeast, the tailings filtration plants are ramping up, and in the North, we improved orebody knowledge at S11D and, in Q4, commissioned the Gelado project. In the Energy Transition Materials business, the operations at Sudbury are now stable, and Onça Puma had its best annual production in the last five years. On Copper, performance has resumed after major maintenance in Salobo and Sossego, and we are off to a great start in 2023. Additionally, our robust pipeline of accretive growth progressed with the successful start-up of Salobo III, the approval of Onça Puma 2nd furnace and the signing of partnerships in Indonesia. We have also re-designed the Executive Committee, ensuring a fitfor-purpose organizaton with a greater focus on our operations and on developing sustainable solutions for the global energy transition. We strongly believe these actions will continue to uniquely position Vale to benefit from the secular trends of the energy revolution impacting the mining industry, creating sustainable long-term value for all stakeholders,” commented Eduardo Bartolomeo, Chief Executive Officer.
- Proforma adjusted EBITDA from continued operations of US$ 5.0 billion in Q4, US$ 1 billion higher q/q, mainly reflecting the higher iron ore sales volumes and higher realized prices in nickel and copper. Proforma adjusted EBITDA from continued operations of US$ 20.9 billion in 2022, 38% lower than 2021 mainly due to 23.6% lower iron ore fines realized prices.
- Free Cash Flow from Operations of US$ 5.7 billion in 2022, vs. US$ 20.0 billion in 2021 due to lower EBITDA.
Disciplined capital allocation
- Capital expenditures of US$ 1.8 billion in Q4, including growth and sustaining investments, up US$ 557 million q/q, but flat y/y, following usual seasonality. Capital expenditures of US$ 5.4 billion in 2022, 8% higher than 2021, due to investments in the Sol do Cerrado solar farm, Serra Sul 120, Capanema and Tubarão Briquette iron ore projects.
- Gross debt and leases of US$ 12.7 billion as of December 31, 2022, US$ 508 million higher q/q, largely due to lower free cash flow from operations and further execution of the share buyback program.
- Expanded Net Debt of US$ 14.1 billion, up US$ 856 million q/q, in line with targeted leverage of US$ 10-20 billion.
Value creation and distribution
- US$ 12.6 billion paid in dividends, interest on capital and share repurchases in 2022. Since 2020, Vale has returned US$ 35 billion to shareholders, representing around 46% of its market cap.
- US$ 1.8 billion in dividends to be paid in March 2023, considering Vale’s ordinary dividend policy applied to 2H22 results.
- 3rd share buyback program now 43% complete, with a disbursement of US$ 3.4 billion to repurchase 213 million shares
- With the three buyback programs, earnings and dividends on a per share basis have each increased 15% since April 2021.
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