11th Feb 2016 07:19
LONDON (Alliance News) - Rio Tinto PLC on Thursday said it is targeting further cost savings in 2016 as it continues to battle the downturn in the market after the miner saw its underlying earnings more than halve in 2015, resulting in a substantial net loss.
Rio Tinto said its underlying earnings, used to measure the underlying performance of the business, fell 51% in 2015 to USD4.54 billion from USD9.30 billion, after revenue dropped to USD34.80 billion from USD47.60 billion. Revenue missed analyst expectations of USD36.62 billion
Net cash from operating activities fell 34% year-on-year to USD9.38 billion from USD14.28 billion last year. That caused Rio Tinto to swing to a hefty USD866.0 million net loss from a USD6.52 billion profit in 2014.
Importantly, the miner kept its dividend flat for 2015 at 215.0 cents.
Rio Tinto said it has slashed its 2016 capital expenditure budget to USD4.00 billion from the previous budget of USD5.00 billion and said its budget for 2017 has been cut to USD5.00 billion from USD7.00 billion. Further out, Rio Tinto set a 2018 capex budget of USD5.50 billion.
In addition, the miner said it is targeting USD1.00 billion of operating cash cost savings in 2016, followed by a further USD1.00 billion of savings in 2017.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
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