Vale to use cash flow to pay dividends, reduce debt -CEO
Brazil's Vale, the world's top iron ore producer, will use cash flow, which could reach $14 billion or $15 billion this year, to cut debt and pay dividends, Chief Executive Officer Fabio Schvartsman said on Monday.
Speaking at an event in Rio de Janeiro, Schvartsman said the miner tended to generate $14 billion or $15 billion in cash in good or normal years, adding that 2017 was normal.
"The first thing we are going to do with the cash is pay debt, and then we are going to make this company's shareholders happy as never before," Schvartsman said, without specifying a time frame.
Schvartsman said that cash generation could also help the company's debt rating and noted that paying very high dividends was becoming company policy. "It is not our goal to keep cash," he added.
Vale has said it wants to diversify its investments. Investors are awaiting Schwartzman's first annual investment plan, which will be released as part of Vale Day later this week.
Schvartsman also said the company would try to improve capital allocation, which should lead to stronger financial results over the long term.
Investments in nickel have not yielded results the company had sought, he said, but Vale is trying to show that better results in the sector are possible.
(Reporting by Rodrigo Viga Gaier; Editing by Lisa Von Ahn)