Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Vale Is Most Traded as Iron Miner Cuts Dividend Plan

Jan. 29 (Bloomberg) -- Vale SA, the world’s largest iron-ore producer, declined to the lowest in seven weeks after reducing the minimum dividend payment it plans for this year by a third to $4 billion amid lower profits.

Vale fell 0.7 percent to 37.41 reais at 1:13 p.m. in Sao Paulo after sliding to 37.27 reais, the lowest intraday level since Dec. 10. The stock was the most traded by value on the benchmark Bovespa index, which fell 0.2 percent.

Vale shareholders of common and preferred stock will get about 77.6 cents per share in two installments on April 30 and on Oct. 31, the Rio de Janeiro-based company said late yesterday in a statement. The proposed minimum matches a $4 billion estimate from Banco Itau BBA SA in a Jan. 21 note and compares with a $6 billion target set a year ago by the company.

The announcement “confirms that the company is adjusting its dividend distribution to an expected decrease in cash flow generation,” Itau analysts Marcos Assumpcao and Andre Pinheiro said in a note to clients dated yesterday. “Vale’s cash flow will be tight in 2013,” they wrote.

Vale paid $6 billion in 2012 dividends, half the record $12 billion returned to shareholders including share buybacks the prior year, as the company is set to post its lowest annual profit since 2009. Chief Executive Officer Murilo Ferreira sold coal, shipping and energy assets and cut investments to the lowest in three years amid weakening minerals and metals demand.

“The proposed minimum dividend is consistent with Vale’s financial policy, which aims to provide strong support to the exploitation of profitable growth opportunities alongside the preservation of a sound balance sheet,” the company said in yesterday’s statement.

The dividend proposal requires board approval, Vale said.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.