Vale’s Q3 2016 Earnings Review: Success Of Company’s Cost Reduction Initiatives Bodes Well For The Future
Vale reported a significant improvement in its Q3 earnings results, with a combination of higher iron ore prices and the success of the company’s cost reduction initiatives driving margin improvement. Though Vale’s realized iron ore prices were higher year-over-year in Q3, the upside for prices of the commodity remains limited in the near term due to a persisting oversupply situation. Rising iron ore production from major iron ore mining companies such as Vale and Rio Tinto in the face of faltering demand from a slowing Chinese economy, which accounts for the purchase of nearly two-thirds of the world’s seaborne iron ore supply, is likely to limit the growth in iron ore prices. With prices of the commodity unlikely to improve significantly in the near term, cost reduction is vital for margin improvement. As illustrated by the following table, Vale’s cost reduction initiatives have been fairly successful over the past year, which will stand the company in good stead going forward.
Have more questions about Vale? See the links below.
- Vale’s Full Year 2015 Pre-Earnings Report
- Vale’s Q4 2015 Earnings Report: Decline In Iron Ore Prices Negatively Impacts Results
- How Important Is China To Vale’s Iron Ore Sales?
- What Is China’s Share Of Vale’s Overall Revenue?
- What Is Vale’s Revenue & EBITDA Breakdown?
- What Is Vale’s Fundamental Value Based On 2015 Results?
- By What Percentage Has Vale’s Revenue & EBITDA Declined Over The Last 5 Years?
- By What Percentage Can Vale’s Revenue & EBITDA Increase Over The Next 3 Years?
- How Has Vale’s Revenue Composition Changed Over The Last 5 Years?
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