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We would like to advise that forward-looking statements may be provided in this presentation, including Vale's expectations about future events or results, encompassing those matters listed in the respective presentation. We caution you that forward-looking statements are not guarantees of future performance and involve risks and uncertainties. To obtain information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM) and, in particular, the factors discussed under "Forward-Looking Statements" and "Risk Factors" in Vale's annual report on Form 20-F.
With us today are:
Mr. Gustavo Pimenta - CEO,
Mr. Marcelo Bacci -Executive Vice President of Finance and Investor Relations,
Mr. Rogerio Nogueira -Executive Vice President, Commercial and Development,
Mr. Carlos Medeiros - Executive Vice President of Operations, and
Mr. Shaun Usmar - CEO of Vale Base Metals
Now I will turn the conference over to Mr. Gustavo Pimenta. Sir, you may now begin.
Gustavo Pimenta:Hello everyone, and thank you for joining Vale's first quarter 2026 conference call.
I would like to start by briefly reinforcing our strategy and our ambition to create superior value for our shareholders. This strategy is grounded in a relentless focus on
operational excellence, combined with disciplined capital allocation and the development of highly accretive growth opportunities, particularly in copper and iron ore, leveraging Vale's unique asset base and endowment.
Recent geopolitical events and the volatility they have introduced to the market only reinforce the importance of building a resilient and competitive business that can perform across a wide range of market conditions. This is exactly what we are doing at Vale.
Despite near-term uncertainties, I am very excited about our Q1 performance and very optimistic about delivering another great year. I'm highly confident about Vale's future and in our ability to navigate the current environment, while delivering robust, value-accretive growth over the long run.
With that in mind, I would like to now turn to the highlights of our first quarter performance.
Safety is a core value at Vale and remains at the center of everything we do.
In the first three months of the year, we safely removed two additional structures from any emergency level, reaching an 80% reduction since 2020.
These achievements reflect disciplined governance, continuous investment in monitoring and engineering solutions, and a strong safety mindset across the organization.
This journey goes beyond procedures and systems. It is fundamentally about culture, accountability, and leadership at every level of the organization.
By consistently advancing safety, we not only protect our people and communities, but
also reinforce Vale's position as a trusted partner.
Now, let me turn to our operational performance.
In Iron Ore, our focus on operational excellence, combined with the flexibility of our product portfolio, once again translated into solid performance this quarter.
Production grew 3% year-on-year, supported by record output at S11D and Brucutu, as well as the successful ramp-up of the Capanema and Vargem Grande projects.
At the same time, we continue to make solid progress on the Serra Sul +20 project. It has now reached 86% physical completion and remains on track to start-up in the second half of the year. Once delivered, Serra Sul +20 will further strengthen our operational flexibility and add incremental volumes to one of the most competitive iron ore assets in the world.
Sales volumes increased by 4% year-on-year, reflecting higher production and supported by healthy global demand.
Importantly, this volume growth leveraged our flexible product portfolio, allowing us to improve price realization, with all-in premiums increasing by US$2.6 per tonne quarter-on-quarter. This translates into around US$ 800 million in annualized revenue, reinforcing the value of our commercial strategy.
Let me now turn to Vale Base Metals.
At Vale Base Metals, we continue to deliver strong operational performance, with double-digit production growth in both copper and nickel.
In Copper, production reached 102 thousand tons in the first quarter, the highest level since 2017 and 13% higher year-on-year. This performance was supported by record output at Salobo and Sossego as well as a solid contribution from our Canadian polymetallic operations, especially at Voisey's Bay.
In Nickel, production also grew strongly, increasing 12% year-on-year, the best first-quarter performance since 2020. This reflects the stable production from the Voisey's Bay Mine Expansion project, along with the successful commissioning of the second furnace at Onça Puma, bringing total production to 49 thousand tons.
During the quarter, we also announced an agreement to form a consortium for the Thompson operations. This transaction is part of our strategic review of assets and supports our broader objective of strengthening the competitiveness of VBM's global mining portfolio, while positioning these operations for long-term value creation.
To that end, I would like to also highlight the release of new standalone asset reports post our VBM day held in March. These initiatives reinforce our commitment to transparency and to providing the market with greater visibility into the quality, scale, and potential of our base metals portfolio. We firmly believe that this increased transparency will support a better understanding of the strategic importance and value-creation potential of Vale Base Metals.
Finally, I would like to highlight a pioneering initiative that reinforces Vale's leadership in innovation and decarbonization. In April, we announced an unprecedented agreement to introduce the world's first ethanol-powered, ocean-going vessels, with operations expected to begin in 2029.
These next-generation Guaibamax vessels have the potential to reduce carbon emissions by up to 90%, marking a major milestone for decarbonization in global maritime transportation. Combined with advanced efficiency technologies and wind-assisted rotor sails, this approach delivers environmental impact, operational flexibility and energy security.
This initiative reinforces our commitment to reducing Scope 3 emissions, and positions Vale as a leader in shaping a more sustainable and competitive future for the industry.
Now, I will turn to Marcelo Bacci to talk about our Financial Performance. I'll be back for
closing remarks before the Q&A session.
Marcelo Bacci:Thanks, Gustavo, and good morning, everyone.
In the first quarter of 2026, our Proforma EBITDA reached US$ 3.9 billion, representing a 21% increase year-on-year.
This strong performance was primarily driven by another very solid operational execution in our three commodities, benefiting from higher volumes and improved price realization.
Vale Base Metals' EBITDA more than doubled compared to last year, reaching US$ 1.2 billion in the quarter. This is yet another demonstration of the significant value being unlocked in this business. VBM's EBITDA would have been even higher absent the approximately US$ 140 million negative impact of provisional price adjustments made at the end of the quarter. Based on today's forward curves, this impact would have been positive, implying a potential reversal in Q2.
In Iron Ore, EBITDA reached US$ 2.9 billion, with a flat but solid performance year-on-year, supported by higher sales volumes and better all-in premiums, more than offsetting the appreciation of the BRL during the quarter.
Now, let's take a closer look at our cost performance.
In the quarter, our C1 cash cost, excluding third-party purchases, reached US$ 23.6 dollars per ton, an increase of 12% year-on-year. As expected, this increase was mainly driven by the BRL's appreciation, combined with the effect of inventories' consumption carried from the previous quarters at higher costs.
The all-in cash cost, in turn, increased by 8%, with stronger all-in premiums and a solid performance in freight, helping to partially mitigate cost pressures.
While external variables such as exchange rates and oil prices can introduce volatility to our cost structure, they further reinforce the importance of our ongoing focus on efficiency, productivity, and operational excellence. Assuming market consensus estimates for 2026 of an average BRL of 5.25 and average oil prices of US$ 90 per barrel, we are working to achieve the top end of our original guidances on a 61%Fe basis. In this slide, you can see different sensitivities for our C1 and all-in costs for iron ore.
Through disciplined execution and a strong focus on controllable cost drivers, we remain confident in our ability to progressively and structurally reduce our cost base, supporting competitiveness and value creation across the cycle.
Turning now to Vale Base Metals, both copper and nickel once again delivered solid and consistent reductions in all-in costs.
Starting with Copper, all-in costs once again reached negative territory, declining by 1.8 thousand dollars per ton year-on-year, reaching minus US$ 0.6 thousand per ton. This very strong result was mainly driven by robust by-product revenues, supported by higher prices and increased gold volumes.
In Nickel, all-in costs declined by 48% year-on-year, reaching US$ 8.2 thousand per ton. This improvement reflects stronger by-product revenues from our polymetallic assets, benefiting from favorable pricing, as well as cost-optimization initiatives at Voisey's Bay. Fixed-cost dilution, driven by a 12% increase in production volumes, also further supported results.
Looking ahead, we expect Vale Base Metals to continue delivering operational improvements, beyond the contribution from by-product prices. In nickel, our focus is
now on maximizing cash flow generation, leveraging on continued cost efficiencies and on the polymetallic nature of our assets.
Now, let's talk about our cash generation.
Our recurring free cash flow generation reached US$ 813 million in the quarter, representing a 61% increase year-on-year. This stronger performance was primarily driven by solid EBITDA combined with the settlement of currency-swap and oil-hedging programs. The more negative working-capital variation reflected higher inventory levels and an increase in accounts receivable, with collections expected over the coming quarters.
Despite the volatility that oil prices can introduce to the cost structures, we remain well positioned thanks to our risk-management strategy, which helps protect and stabilize our cash flow. Our oil hedge program was designed to limit exposure to tail scenarios through the use of zero-cost collar instruments. These hedges provide Brent crude oil price protection above 80 dollars per barrel for around 70% of our bunker oil demand in 2026, supporting greater visibility and stability in cash generation.
Finally, I would like to highlight the strength of our cash position and our continued commitment to shareholder returns. In the first quarter, we distributed US$ 2.7 billion in dividends and interest on capital, while we also repurchased nearly 5 million shares under our current share-buyback program.
As you can see on the next slide these distributions resulted in a seasonally expected increase in expanded net debt, which reached US$ 17.8 billion in the quarter.
Our target range remains unchanged at 10 to 20 billion dollars, with a clear objective of operating around the midpoint of this range. Important to say that under the current price environment for iron ore, copper and nickel, we are increasingly confident on the possibility of paying extraordinary dividends and on further executing on our buyback program throughout the year.
Before passing the floor back to Gustavo for his closing remarks, I would like to reinforce that we are building a company designed to be resilient through the cycle. Our flexibility, cost discipline, and capital-allocation approach are key pillars of this strategy. With these elements in place, we expect to continue benefiting from the strength of our iron-ore portfolio, while fully unlocking the potential of our base metals business, consistently delivering value to all our stakeholders.
Gustavo, please.
Gustavo Pimenta:Thanks, Marcelo. I would like to highlight the key takeaways from today's call:
First, safety remains a core value at Vale, and we continue to make consistent progress in strengthening our safety culture and performance.
Second, we continue to execute with discipline across our three business lines, maintaining a strong focus on operational excellence.
Third, we are persistently pursuing cost efficiencies to preserve competitiveness and build resilience in the face of ongoing external cost pressures.
Fourth, we remain fully committed to our sustainability agenda and our 2030 goals, advancing innovative solutions that support our decarbonization and sustainability targets.
And lastly, our disciplined approach to capital allocation remains unchanged, enabling us to generate strong cash flow and deliver attractive returns to our shareholders.
Now, let´s open for the Q&A session. Thank you.