|Rio Tinto in the black, books US$3.4b writedowns
Anglo-Australian mining giant Rio Tinto reported a US$3.67 billion annual net profit after a major cost-cutting drive under which thousands of workers were sacked and capital spending was slashed.
New chief Sam Walsh was brought in with a mission to turn around the miner, which lost US$3.03 billion in 2012 – its first loss in 18 years – after US$14.36 billion in writedowns. That disaster claimed the scalp of former boss Tom Albanese, AFP reports.
Walsh said the company had “achieved underlying earnings of US$10.2 billion, exceeded cost reduction targets and set production records. In turn, this has enhanced our cash flow generation and lowered net debt.''
The results were again weighed by writedowns worth US$3.43 billion on projects including Mongolia's Oyu Tolgoi copper and gold mine and the Gove Alumina project in northern Australia.
Rio said it had slashed 4,000 jobs in 2013 and divested a further 3,300 positions out of the company through asset sales.
The jettisoning of underperforming assets continued apace, with divestments worth US$3.5 billion announced or completed in 2013 as Rio narrows its focus to its major businesses of iron ore, coal, copper and petroleum.
Capital expenditure was reduced by 26 percent to US$12.9 billion and forecast to be curtailed further in 2014 to an estimated US$11 billion and US$8 billion the year after.
The company also set annual production records in its key iron ore and electricity coal businesses as well as bauxite. Copper also rallied strongly.
Increased volumes added US$538 million, primarily due to expansion of capacity at Rio's flagship Pilbara iron ore operations in western Australia.
Underlying iron ore earnings were up by 7 percent on 2012 at US$9.86 billion due to record sales volumes, “marginally'' higher prices, an easing in the Australian dollar and cost-cutting in the business.
Commodity price movements wiped US$1.29 billion off the bottom line compared with 2012, but improvements in the US dollar exchange rate boosted results by US$1.01 billion.