Brazil miner Vale has record second-quarter profit

RIO DE JANEIRO (Reuters) - Brazil's Vale, one of the world's top three miners, posted a record net profit of $5.009 billion (2.5 billion pounds) in the second quarter, up 22.3 percent from a year ago, helped by a hefty price hike for its iron ore.

Vale, the world's biggest iron ore producer, also said on Wednesday that earnings before interest, taxes, depreciation and amortization (EBITDA) -- a key measure of cash flow -- rose 23 percent to $6.218 billion under U.S. Generally Accepted Accounting Principles (GAAP).

Many analysts did not provide forecasts for Vale's second-quarter earnings as banks are restricted from talking about the firm due to its $12.17 billion global share offering last month.

Vale said that despite sharp recent declines in the share prices of metal and mining firms sparked by the U.S. credit crunch, demand for its commodities remained strong.

"In spite of the current risks, we believe that the fundamentals of the mineral and metals markets have not changed, remaining very robust," it said in its earnings statement.

Vale's shares gained 1.86 percent in local trading on Wednesday before the results were announced, while the broader market rose 1.9 percent. On the New York Stock Exchange, Vale rose 52 cents, or 2 percent, to $26.68.

Analysts had expected solid results for the second quarter, when a large 65 percent to 71 percent price hike for iron ore took effect. Clients had agreed to the hike in February.

World prices for nickel, however, have tumbled from a peak of more than $50,000 per tonne in 2007, closing at $17,678 on Wednesday. The value of Vale's nickel sales slumped to $1.87 billion in the second quarter from $3.2 billion a year earlier.

Reflecting the price shift, the share of revenue from nonferrous minerals fell to 32.8 percent in the period from 52.3 percent a year earlier.