Rio Tinto Group reported full-year profit fell 51 percent after
commodity prices plunged amid slowing growth in China, forcing the
world’s second-biggest mining company to scrap its progressive dividend
policy.
The producer joins rivals including Vale SA and Glencore Plc in trimming or abandoning
dividend payments as a safeguard against the deepening commodities
collapse. Rio’s payout in 2016 won’t be less than $1.10 a share, after
it held the 2015 dividend at $2.15 a share, it said Thursday in a
statement.
Underlying profit fell to $4.5 billion in 2015, from $9.3 billion a year earlier, London-based Rio said. That compares with a $4.6 billion average of 24 analyst estimates compiled by Bloomberg.
Global mining companies are under pressure from investors and credit ratings agencies to conserve cash as the collapse in prices continues to hurt earnings. The Bloomberg Commodity Index plunged last month to the lowest in 15 years with Anglo American Plc warning this year may be worse than 2015.
“Commodities prices will bottom this year, but on the other hand there is still downside risk for mining equities,” Jeremy Sussman, a New York-based analyst at Clarksons Platou Securities Inc. said by phone, before Rio’s statement was published.
Rio’s Sydney traded shares fell 1.3 percent to A$40.99 in Thursday trading and have plunged 31 percent in the past 12 months.
Underlying profit fell to $4.5 billion in 2015, from $9.3 billion a year earlier, London-based Rio said. That compares with a $4.6 billion average of 24 analyst estimates compiled by Bloomberg.
Global mining companies are under pressure from investors and credit ratings agencies to conserve cash as the collapse in prices continues to hurt earnings. The Bloomberg Commodity Index plunged last month to the lowest in 15 years with Anglo American Plc warning this year may be worse than 2015.
“Commodities prices will bottom this year, but on the other hand there is still downside risk for mining equities,” Jeremy Sussman, a New York-based analyst at Clarksons Platou Securities Inc. said by phone, before Rio’s statement was published.
Rio’s Sydney traded shares fell 1.3 percent to A$40.99 in Thursday trading and have plunged 31 percent in the past 12 months.
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