Rio Tinto improved its financial performance almost across the board during the first half of 2017.
It did not, however, meet the forecasts of analysts in its half year results despite delivering a 152 per cent increase in profit against the same period of 2016.
The miner recorded earnings of $US3.94 billion ($4.97 billion) for the six-month period, which fell below the $US4.26 billion that analysts expected. Rio’s shares in London lost 2.6 per cent in value after releasing the results.
Rio’s iron ore division dominated the company’s improved results, contributing $US3.25 billion of the earnings, an 87 per cent increase on the first half of 2016.
The company benefitted from the lift in iron ore prices, which were 42 per cent higher on average during the half.
Rio’s coal-focused energy and minerals business also recorded a major boost in profits, up 695 per cent to $US652 million.
While Rio’s financial results may not have satisfied analysts, the company’s shareholders should be happy with news they will receive $US3 billion through a $US1.10 a share interim dividend, worth $US2 billion, and a $US1 billion share buy-back programme.
Rio chief executive Jean Sebastien Jacques said by driving performance, focusing on cash and allocating it with discipline the company was delivering superior cash returns to shareholders.
“These are strong results: operating cash flow was $6.3 billion and we met our $2 billion cash cost reduction target six months early,” he explained.
“We are now shifting gear to focus on the untapped value from our productivity programme and continue to strengthen our portfolio to build higher returns for the future.”
Rio announced the sale of its Hunter Valley thermal coal division during the first half. It also continues to advance the Oyu Tolgoi, Amrun and Silvergrass prospects as key growth projects.