Daily Times

Mining giant Rio Tinto on Wednesday reported a bumper 33 percent jump in first-half net profit on the back of strong commodity prices, rewarding shareholders with a record interim dividend and a further stock buyback.

The Anglo-Australian firm’s net profit in the six months to June 30 came in at US$4.38 billion while underlying profit, its preferred measure which excludes impairments and exchange rate losses, jumped 12 percent to US$4.42 billion.

“We have reported another strong set of results,” chief executive Jean-Sebastien Jacques said.

“We will continue to invest in Tier 1 growth, further strengthen our portfolio and maintain a strong balance sheet in order to deliver superior returns to shareholders in the short, medium and long term.”

Rio declared an interim dividend of 127 US cents, totalling US$2.2 billion, the largest half-yearly return in its history.

The world’s second biggest miner also announced a further buy-back of $1.0 billion of its shares, targeted at its London stock.

Rio, like other miners, has benefited from a rebound in prices of its main commodity iron ore after a slump brought on by a supply glut and a slowdown in growth in the world’s top commodities consumer China.

It is also swimming in cash after offloading a raft of Australian coal assets in the past year as it moves toward a full exit from the industry.

Rio pledged that the US$5 billion it will reap from those asset sales, minus tax, will also be returned to shareholders in a form that had not yet been determined.

The sale of its remaining coal assets in Queensland state for US$3.95 billion, which it announced earlier this year, was now complete, it said.

Rio has sold its stake in the Hail Creek mine and its interest in the undeveloped Valeria project to Swiss-based commodities giant Glencore for US$1.7 billion.

The miner also offloaded its interest in the Kestrel mine to a consortium comprising private equity manager EMR Capital and PT Adaro Energy Tbk for US$2.25 billion.

Rio shares closed 0.55 percent higher at Aus$81.65 ahead of the result.

Published in Daily Times, August 2^nd 2018.