Rio Tinto's Q3 Production Results Strong, Outlook Impresses
Zacks Investment Research | Oct 19, 2016 10:43PM ET
Rio Tinto (LON:RIO) plc (NYSE:RIO) reported strong third-quarter 2016 results. Barring thermal and semi-soft coal, output volumes of iron ore, bauxite, aluminum, mined copper, titanium dioxide and hard coking coal increased year over year.
Aggregate Pilbara iron ore production came at 83.2 million tonnes (Mt), up 2% year over year. The upside was driven by improved productivity and constant ramp-up activities conducted in the expanded mines across the company’s Pilbara operations. Rio Tinto believes that its iron ore production in the upcoming quarter would be higher on the back of the Nammuldi Incremental Tonnes (NIT) project’s second phase completion.
However, gross Plibara iron ore shipments were down 5% year over year to 80.9 Mt.
Aggregate bauxite output during the quarter was 12,422 kilo tonnes (Kt), up 10% year over year. The improvement was driven by increased productivity in the company’s Gove and Weipa mines.
Output of aluminum was 924 Kt, up 11% from the year-ago tally on the back of higher production from the expanded and modernized Kitimat smelter facility.
Mined copper volume was 133.3 Kt, up 16% year over year. Higher copper grades boosted growth.
Output of titanium dioxide slag was 267 Kt, up 10% year over year.
Gross volume of hard coking coal was 2,175 Kt, up 17% year over year. Outperformance of the company’s Kestrel mine bolstered this volume.
However, thermal and semi-soft coal production in the third quarter totaled 5,412 Kt, down 2% year over year. The downside was witnessed on the back of the Bengalla joint-venture sale and restructuring of the Coal & Allied.
Growth Strategy
Rio Tinto strives to improve its operational performance through disciplined cost management and productivity enhancement strategies. The company has been widening its manufacturing capacity through new investments financed by its increased free cash flow.
Share Price and Zacks Rank
Rio Tinto currently sports a Zacks Rank #1 (Strong Buy). You can see .
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