Rio Tinto’s Full Year 2016 Earnings Preview: Higher Iron Ore Prices And Productivity Improvements To Boost Earnings
Rio Tinto, the world’s second largest producer of iron ore, will report its results for the full year 2016 and conduct a conference call with analysts on February 8. [1] We expect Rio Tinto’s earnings to benefit from a recovery in iron ore prices and the impact of the company’s productivity improvement initiatives. Iron ore prices averaged higher in 2016 after two consecutive years of decline amid a global oversupply situation. Production curtailments by high-cost producers in response to an extended downturn in prices helped restore a more favorable demand supply equation, translating into a recovery in iron ore prices.
Apart from the recovery in iron ore prices, Rio Tinto’s productivity improvement initiatives will help prop up the company’s bottom line. A range of technology driven initiatives targeting productivity improvements through improved reliability and utilization rates are expected to moderate growth in the company’s operating costs. [2] Apart from benefiting Rio’s iron ore mining operations, these productivity improvement initiatives will also help prop up the margins of the company’s copper and aluminum mining operations, which operated under subdued commodity pricing environments in 2016. The following tables summarize our expectations from Rio’s earnings results.
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Have more questions about Rio Tinto? See the links below.
- What Is Rio Tinto’s Revenue And EBITDA Breakdown?
- By What Percentage Did Rio Tinto’s Revenue & EBITDA Decline Over The Last 5 Years?
- By What Percentage Can Rio Tinto’s Revenue & EBITDA Change Over The Next 3 Years?
- How Has Rio Tinto’s Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Has Rio Tinto’s Capital Expenditure Declined Over The Past 5 Years?
- To What Extent Would The Commencement Of Production At Simandou Boost Rio Tinto’s Iron Ore Shipments?
- To What Extent Would The Development Of The Underground Section Of The Oyu Tolgoi Mine Boost The Mine’s Overall Output?
Notes:
Notes:
- Annual Results, Rio Tinto Website [↩]
- Rio Tinto Investment Seminar Presentation, Rio Tinto Website [↩]