Rio Tinto kicks off quarterly production reports

Stock

Rio Tinto (RIO) $78.82 as at 16/10/2018

Event

The next month is a busy one for the miners with quarterly production numbers upon us again. Here’s a quick calendar of events….

Today, RIO released a mostly inline set of numbers for the three months to September. Iron ore production was softer than the previous quarter, but this was been expected – Rio was going full tilt in Q2 and maintenance was planned, although full year guidance was maintained here. Copper production continued its trend higher, with guidance moved to the top end of the 510-610kt range. Aluminium was soft, and guidance moved to the lower end of previous guidance as a result of strikes at Rio’s Canadian smelter. Coal took a hit, but all expected with asset disposals reducing Rio’s exposure here.

Elsewhere, alumina, diamond & uranium guidance was all maintained and production more or less as expected. Bauxite production was down 4% QoQ, but guidance lifted slightly to 50-51Mt.

Rio Tinto (RIO) Chart

Market Matters Take/Outlook

The big drivers to Rio’s earnings were as expected plus they said full year production would come in at the top end of the guided range. The stock is trading in line with peers, ~+1.7% on the day. We like Rio, there is plenty to keep this company going and it should perform well late in the cycle.