Estrada de Ferro Vitória a Minas S.A.: Quanto vale esse trem?

Abstract

This study analyzes the economic value of the Vitória-Minas Railway (EFVM). To establish this value, we opted for the valuation methodology called Discounted Cash Flow (DCF), developed through the financial statements made available by Vale S.A. These statements are extracted from the profit and cost centers of Vale S.A., a methodology called carve-out, since the railroad does not have independent accounting from the mining company. To analyze the cash flows generated by the railroad, the statements from 2016 to 2023 were studied. The objective of this study is to develop the valuation of EFVM and, as a secondary objective, to test the limits of the carve-out financial statements in the development of a valuation using the DCF method, in order to identify possible limitations in establishing the economic value of EFVM. The results show that EFVM had an economic value in 2023 of R$13.939 billion and that a significant part of this value was generated from the net amounts allocated to the railroad's cash and cash equivalents account, namely R$8.998 billion. In addition, the carve-out statements showed the absence of onerous liabilities for EFVM which, together with the high cash and cash equivalents account, had an excessive influence on the value of the railroad.