Rio Tinto H2 underlying profit slumps 47 pct

MELBOURNE Thu Feb 14, 2013 1:17am EST

MELBOURNE Feb 14 (Reuters) - World no.3 miner Rio Tinto reported a 47 percent plunge in half-year underlying profit on Thursday, its worst since 2009 due to sharp falls in commodity prices, although its new chief pointed to a pick-up in China as a positive sign.

Chief Executive Sam Walsh was anointed last month when his predecessor was sacked for misjudged aluminium and coal acquisitions that led to $14.4 billion in writedowns and left the company in the red for the first time ever in calendar 2012.

"Looking ahead, we see the positive momentum in the fourth quarter of last year being sustained into 2013 with Chinese GDP growth returning to above 8 per cent in 2013," Walsh said in a statement.

Underlying profit fell to $4.149 billion for July-December 2012 from $7.768 billion a year earlier. That beat analysts' forecasts for a half-year underlying profit of $3.93 billion.

Rio's iron ore business, which Walsh led until January, made up 99 percent of underlying earnings in the second half, with higher volumes partly offsetting a drop in prices, which cushioned losses in aluminium and energy.

For the full year, the company reported a $2.99 billion loss, mostly reflecting writedowns on its Alcan takeover in 2007 and a coal acquisition in Mozambique, where transport challenges have slowed development and coal output estimates have been cut.

Rio's shares touched a one-year high in Australia of A$72.30 ahead of the result. The stock has climbed nearly 30 percent over the past six months, outperforming the broader market as metals demand in China has picked up.

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