Rio Tinto mines increased profits after massive cost reduction
Mining giant Rio Tinto has smashed expectations and reported profit before tax of over £6bn for the six months to 30 June – almost double what it was the previous year.
The Anglo-Australian FTSE 100 company beat market forecasts through deep cuts in capital spending rapid efficiency savings, while hiking iron ore output.
Net debt was cut to $16.1bn, within the range it wanted to achieve before considering returning capital to shareholders. Underlying earnings climbed 21 per cent to $5.1bn
Rio Tinto chief executive Sam Walsh said: "Our outstanding half-year performance reflects the quality of our world-class assets, our programme of operational excellence and our ability to drive performance during a period of weaker prices.
"These results show that our current strategic and management focus is making a meaningful contribution to cash flow generation."
The company said it remained confident in the long-term fundamentals of demand, but recognised the changing nature of China's economic development. With global GDP growth in 2014 expected to top three per cent, Rio Tinto belives commodity demand will be supported.
The miner has also allocated a dividend of $0.96 per share.