Rio Tinto H1 Profit Climbs, Revenues Down On Lower Prices; Declares Dividend

(RTTNews) - Anglo-Australian mining giant Rio Tinto Plc. (RTNTF, RIO, RIO.L, RTPPF) reported Wednesday higher profit in its first half, benefited by one-time gains. Underlying earnings were hurt by weak sales mainly reflecting lower prices.

The company's profit before taxation for the first half increased to $2.10 billion from $1.75 billion in the same period last year.

Net profit attributable to the owners of the company more-than-doubled to $1.71 billion from $806 million in the prior-year period. Earnings per share from continuing operations increased to 94.9 cents from 43.5 cents last year.

Net earnings reflected net gains on disposals of business of $0.2 billion, non-cash exchange rate and derivative gains of $0.6 billion, an onerous contract provision of $0.5 billion and restructuring costs of $0.1 billion.

However, underlying earnings for the period were $1.56 billion, down 47 percent from $2.92 billion in the year-ago period. Underlying earnings per share fell to 87.0 cents from 159.1 cents last year.

The Iron Ore group's underlying earnings of $1.74 billion were 17 percent lower than 2015 first half. This was primarily attributable to lower prices.

The company noted that cash cost improvements, lower energy costs and positive currency and other movements partly offset the $1.9 billion impact of lower prices.

Consolidated sales revenues for the half year declined 13.8 percent to $15.50 billion from $17.98 billion in same period of last year, reflecting a $2.6 billion reduction due to the decline in commodity prices.

Volumes were higher in iron ore, following the increase in capacity at the Pilbara ports and mines, and in bauxite, from increased production at all four mines. Volume declined in refined copper at Kennecott, as a result of the drawdown in inventory in 2015 first half, and in gold production at both Kennecott and Oyu Tolgoi.

First half iron ore sales of 158.9 million tonnes were eight percent higher than 2015 with a strong rail performance and no major weather events in contrast to last year.

The company said it delivered strong operational performances in iron ore, bauxite and aluminium, with all key commodities on track to meet full year guidance.

Looking ahead, Rio Tinto said that its production guidance is unchanged, except for mined copper, which is now expected to be between 545 and 595 thousand tonnes in 2016.

Further, the company declared interim dividend of 45 US cents per share, equivalent to $0.8 billion. The dividend is consistent with its policy that for 2016 only, the total full year dividend will be not less than 110 US cents per share, equivalent to $2 billion.

In London, Rio Tinto shares were trading at 2,423 pence, down 0.76 percent.