Home / Metal News / Nickel / Rio Tinto Expects Aluminum Unit To Break Even In Second Half
Rio Tinto Expects Aluminum Unit To Break Even In Second Half
Nov 28,2011 08:59CST
industry news
Source:SMM
Rio Tinto PLC said Monday that it expects underlying earnings at its aluminum division to hit break-even for the second half of the year。

MELBOURNE, Nov 27, 2011 (Dow Jones) -- Rio Tinto PLC (RIO) said Monday that it expects underlying earnings at its aluminum division to hit break-even for the second half of the year, a sharp decline from the first six months due in part to higher raw material costs.

The Anglo-Australian mining company has identified 13 aluminum assets for sale or closure as it targets an improvement in its margin on earnings before interest, tax, depreciation and amortization to 40% in 2015 from 21% last year.

Jacynthe Cote, chief executive of Rio's Alcan aluminum division, speaking on a webcast seminar in Sydney said the company is facing short-term macroeconomic challenges. The aluminum division recorded EBITDA of US$1.44 billion on gross sales revenue of US$7.95 billion in the first six months of the year.

Analysts are likely to trim earnings expectations over the coming days as a result of the comments, but are expected to remain bullish on the company, said Peter Esho, chief market analyst at City Index.

Esho said breakeven for the aluminum division is a "big turnaround in a short period of time and not the best outcome for Rio."

At 0010 GMT, Rio's shares were trading 2.3% higher at A$63.36, in line with a gain in BHP Billiton Ltd.'s (BHP) shares and amid an advance in the wider market.

Rio Tinto
aluminum Al

For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news