“Dire conditions on the commodity markets have led Rio Tinto to report a full year loss of $866m from a profit of $6.5bn the previous year, despite production increases in its full year results this morning,” Miah added. “However excluding impairments, write-downs and derivatives losses, investors should acknowledge that an underlying profit of $4.5bn was made.”
“Rio Tinto’s results met or beat consensus expectations, but forward guidance reflects a company preparing itself further for tougher times,” said Investec analyst Hunter Hillcoat. He also retained a buy recommendation on the shares.
“Two year capex guidance of $4bn and $5bn in 2016 and 2017 is a total of $2.9bn below consensus expectations of $5.1bn and $5.8bn respectively. This seems to reflect complete focus on the three core projects: Amrun, Silvergrass and OT, with others back to the drawing board. Together with the $1.9bn saving in the 2016 dividend and targeted cost savings of $2bn per annum, this gives Rio significantly more headroom to preserve the balance sheet,” he said
