Brazil Miner Vale's Third-Quarter Profit Rises

Brazil's Vale, one of the world's top three mining companies, said Thursday its third-quarter net profit rose sharply as gross revenues and iron ore sales hit records but nonferrous metal sales slumped.

Net profit rose to $4.8bn, up 64% from the same period last year but down 3.8% from the previous quarter, Vale said in a statement.

Vale, the world's biggest iron ore producer, said earnings before interest, taxes, depreciation and amortization (EBITDA) - a key measure of cash flow - rose to $6.4bn from $4bn, according to US Generally Accepted Accounting Principles (US GAAP).

The average target of five analysts polled by Reuters was for net profit to remain unchanged in local currency from a year ago.

Vale's shares lost 3.32% in local trading on Thursday before the results were released, while the broader market fell 3.57%.

Gross revenues hit a record of $12.1bn, up 11.2% from the previous quarter and up 49.2% a year earlier.

Iron ore and pellet shipments reached an all-time high of 85.9 million metric tons in the third quarter.

But shipments of nonferrous minerals, such as nickel and copper, fell 7.2% from a year earlier and 9.3% from the previous quarter to $3.25bn.

This was due primarily to the fall in nickel prices, which fell to $19,691 per metric ton in the third quarter from $32,312 per metric ton a year earlier.

Nonferrous minerals now make up 26.8% of overall gross revenues, down from 32.8% in the previous quarter and 43% a year earlier.

"While we continue to have a strong belief in the soundness of the long-term fundamentals of minerals and metals markets, nonetheless we do recognise the risks embodied in the current global economic environment," Vale said in the statement.

The company sees a slowdown in China bottoming out in early 2009 and the economy rebounding in the first half of 2009 driven by higher infrastructure spending and a recovery of real estate investment.

China is Vale's main market for iron ore and pellets.

Vale denied rumors this week that it was preparing a renewed proposal to buy a stake in Swiss rival Xstrata .

The company will hold a conference call on the results on Friday at 2pm GMT.

By Roberto Samora; editing by Phil Berlowitz, Jeffrey Benkoe and Bernard Orr, Reuters.