Mining giant Rio Tinto Plc (RTNTF.PK,RIO: Quote,RIO.L,RTPPF.PK) Thursday reported a loss for full-year 2012, reflecting price decline in all of its major commodities as well as $14.36 billion impairment charges. However, the company said it is aiming cumulative cash cost savings of more than $5 billion to be achieved over the next two years, equivalent to an annual run rate of $3 billion by 2014.
Sam Walsh, chief executive of the company said, "...we will deliver our capital reduction and cost savings targets and improve performance across our business."
Last month, Tom Albanese, who has been with the company for the last 30 years, stepped down as chief executive and Iron Ore chief executive Sam Walsh was appointed his successor. Separately, Rio Tinto announced today the appointment of Andrew Harding as Iron Ore chief executive.
For the year, the company recorded impairment charges net of reversals, totaling $14.36 billion, higher than $9.29 billion last year. These impairments include $3 billion relating to Rio Tinto Coal Mozambique or RTCM, as well as reductions in the carrying values of Rio Tinto's aluminum assets in the range of $10 to $11 billion and many smaller asset write-downs.
For the full year, the company posted a net loss attributable to owners of $2.99 billion or 161.7 cents per share, compared to net earnings of $5.83 billion or 301 cents per share in the prior year.
On an underlying basis, excluding items, earnings were $9.3 billion, down 40 percent from last year. Loss before tax was $2.57 billion, compared to a profit before tax of $13.21 billion a year earlier.
The company noted that average prices declined from record highs experienced in 2011 for nearly all of its major commodities, with the exception of gold which was up six percent. Average Platts price for 62 percent Pilbara fines declined 24 percent from last year. Copper prices were down 10 percent, aluminum prices averaged 16 percent lower and molybdenum was 17 percent down from last year.
Production of Iron ore - Rio Tinto share - increased 4 percent to 198.9 million tonnes.
Consolidated sales revenue for the year slid 16 percent to $50.97 billion from $60.54 billion a year earlier.
In London, Rio Tinto shares are currently trading at 3,699 pence, down 1.54 percent, on a volume of 4.06 million shares.
RIO.AX trades at A$72.07, up 2.28 percent, on a volume of 3.82 million shares.
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by RTT Staff Writer
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