Rio Tinto Posts First-Ever Loss

Submitted by Share Trading on 15 February, 2013 - 09:27

Mining conglomerate, Rio Tinto (ASX:RIO) have released its full year results to the Australian stock market investors and share traders.

  • Rio Tinto have posted its first loss in its history.
  • Rio Tinto made a Net Loss of US$2.99 billion for the full financial year results for 2012, compared to the profit of $5.83 billion generate din 2011.
  • The loss was largely attributed to impairments against its aluminium and Mozambique coal assets.
  • Rio's operating profit exceeded market expectations, reporting underlying earnings of US$9.3 billion for 2012.
  • Incoming Rio Tinto chief executive Sam Walsh said, "In 2012 we generated strong margins in copper, iron ore and minerals. But our aluminium and energy businesses faced a deterioration in market conditions coupled with rising costs which we are addressing through our cost saving and value enhancement programs. Looking ahead, we see the positive momentum in the fourth quarter of last year being sustained into 2013 with Chinese GDP growth returning to above 8 per cent in 2013. We expect market uncertainty and price volatility to persist as long as the structural issues in Europe and the United States remain unresolved."
  • Rio Tinto has not paid any minerals resource tent tax (MRRT). The MRRT has only raised $126 million in the first 6 months when the government had forecast $2 billion for the full year.
  • Former chief executive Tom Albanese departed on 17 January, the same day impairments were announced to the stockmarket, with his replacement as Mr Walsh, who was the long-serving iron ore chief executive.
  • Impairments included: US$14.4 billion including about US$2.9 billion against the Mozambique coal assets (acquired from the 2011 takeover of Riversdale Mining) and US$11 billion against aluminium assets.
  • Rio Tinto is the world's second largest iron ore producer.
  • Rio Tinto was first founded in London in 1873 with the purpose of mining copper along the river Tinto in Spain. The company has not posted an annual loss since both its UK and Australian assets merged with a dual listing in 1995.
  • Rio Tinto annual dividend distributions were up 15 percent from the previous year of US$1.67 per share. Final dividend is at 94.5 cents per share, up from 91 cents.