Rio Tinto’s underlying earnings fell 47% to $US1.563 billion for the June half year as the big miner continues to be hit by a global fall in commodity prices.
The result, the lowest half year in 12 years, was within analyst expectations.
The company announced an interim dividend of 45 US cents a share, consistent with its promise to pay no less than 110 US cents for the full year. However, that level would still be 48% down on last year’s payout.
CEO J-S Jacques says Rio Tinto generated net cash from operating activities of $3.2 billion against a backdrop of continued volatility and lower commodity prices.
“We focus on delivering value to shareholders,” he says.
Rio says the credit-fuelled bounce in Chinese construction activity has had a positive impact on commodity markets in the first half of 2016, but its impact has been uneven, benefiting most steel raw materials.
“This has pulled prices up from the multi-year lows seen at the start of the year, as markets continue to rebalance,” the company says.
“Growth in China has stabilised, but it is on a long transition path of slower and less commodity-intensive growth.
“Meanwhile the global economy seems stuck in a subdued low-productivity growth pattern which would indicate that continued caution is required for the second half of 2016.”
Rio Tinto’s cost cutting continues, with $US600 million saved in the half year.
The result was helped by improving prices for iron ore. The iron ore price briefly reached above $60 per dry metric tonne in early April and averaged close to $50 over the first six months of the year after dipping below $40 in January.
The earnings result in detail: