LONDON (dpa-AFX) - Anglo-Australian mining giant Rio Tinto Plc (RIO, RIO.L, RTNTF.PK, RTPPF.PK, RIO.AX) Thursday reported a 59 percent drop in 2011 profit, as it recognized a significant impairment charge related to its aluminum business. Underlying earnings, which excluded special items, increased from last year driven mainly by iron ore operations and higher prices for many of its commodities. The board has also recommended raising the final dividend for the year.
For the full year, net earnings attributable to owners dropped 59.1 percent to $5.83 billion or $3.01 per share from $14.24 billion or $7.22 per share in the previous year.
In the year, the company recorded impairment charges of $9.29 billion, significantly higher than $739 million a year earlier, pertaining mainly to the acquisition of Alcan Engineered Products.
Underlying earnings increased 11.2 percent to $15.55 billion or $8.08 per share from $13.99 billion or $7.13 per share reported a year ago. Underlying EBITDA was $28.52 billion, 10 percent higher than $25.98 billion in the prior year. The company has restated its prior-year results.
Profit before tax dropped to $13.21 billion from $20.49 billion a year earlier.
Consolidated sales revenue for the year grew 9.7 percent to $60.54 billion from $55.17 billion last year, with revenues from Iron Ore operations rising to $29.91 billion from $24.02 billion in 2010.
Iron ore production for the year increased 2 percent to 244.6 million tonnes, of which Rio Tinto's share was 191.8 million tonnes, up 4 percent from a year ago.
The company noted that prices improved for nearly all of its major commodities. Copper prices increased 18 percent and gold prices were up 29 percent from a year ago. Aluminum prices were 10 percent higher than 2010.
Spot iron prices traded 15 percent above 2010 levels, but ended the year 25 percent below due to price weakness in the fourth quarter driven by Chinese destocking, Rio noted.
Looking ahead, Jan du Plessis, chairman of the company said, 'We anticipate that uncertainty in the financial markets, particularly around the euro, together with elevated price volatility will continue into 2012. This leads us to remain cautious about near term prospects. However, the medium to long term picture remains very positive for metals and minerals as strong demand growth from emerging markets continues.'
The company also said it is on track to increase the capacity of its low cost iron ore operations in Western Australia by over 50 percent by the end of the first half of 2015.
The board has also recommended raising the final dividend to $0.91 per share from the year-ago's $0.63 per share, thus taking total dividend to $1.45 per share from $1.08 per share.
RIO closed Wednesday's regular trading at $61.53 on the NYSE. In London, Rio shares are currently trading at 3,807 pence, down 66.50 pence or 1.72 percent.
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© 2012 AFX News
