Boston, MA, 11/18/2013 (wallstreetpr) – Brazil-based mining company Vale S.A. (NYSE:VALE) divested its entire stake worth about $1.82 billion dollars after raising the size of its shares offering in Norwegian aluminum producer Norsk Hydro ASA (NYSE:NHYDY), controlled by its wholly-owned subsidiary, to 407.1 million shares from an earlier 220 million on the same day. Pursuing an over-allotment option, the miner also plans to present up to 40.7 million additional shares. Further, the South American miner has plans to sell off 35.9% of its stake in VLI S.A.
An ongoing part of Vale’s investment reduction and cost-leveraging strategy to cut stake in non-core assets, the disinvestment move in Norsk Hydro will help the mining giant and the world’s largest iron ore producer to better focus on its core mining business, and eventually target better capital allocation and maximize shareholder value.
Triggered by recent marked improvements in its management methods and its revenue and costing models, Vale’s financial results for the third quarter have shown good improvement. For the third quarter, Vale’s underlying earnings per ADR (American Depositary Receipt) came in at $0.72, up 58.8% from its corresponding quarter of 2012. Earnings rose 12.9% sequentially, beating the analyst estimates of 12.5% amounting to roughly $0.64 per ADR.
Riding on bolstered production capacities and especially strengthened iron ore prices, Vale’s revenues satisfied analyst predictions by touching the estimated $12.9 billion, registering a 10.8% rise over the corresponding FY2012 quarter. Vale’s management expects further surge in production capacities with enhanced mining operations in addition to its cost-cutting measures, further boosting the miner’s earnings.
Vale stocks have performed well, fluctuating largely between the $14 and $16 marks over the last 90 days on NYSE and reaching $17 twice. The miner’s shares registered a 1% increase to close the day at $15.77 on November 15 from a previous close of $15.61. After-hours trading saw the shares dip slightly to $15.66.
