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Rio Tinto H2 profit surges 45 pct as cost cuts take hold
February 13, 2014 / 6:16 AM / in 4 years

Rio Tinto H2 profit surges 45 pct as cost cuts take hold

MELBOURNE, Feb 13 (Reuters) - Global miner Rio Tinto reported a 45 percent jump in second-half profit on Thursday, beating market forecasts thanks to sharp cost-cutting, lower capital spending and production growth.

The world no.2 miner surprised the market with a 15 percent increase in its annual dividend in a show of confidence in its cashflow growth, which may herald a big capital return to shareholders later this year or in 2015.

“The 15 percent increase in our dividend reflects our confidence in the business and its attractive prospects,” Chief Executive Sam Walsh, who took the reins a year ago, said in a statement.

Underlying earnings for the six months to Dec. 31 rose to $5.99 billion from $4.12 billion a year earlier, based on Reuters calculations off the full-year result, and compared with analysts’ forecasts of around $5.49 billion.

Rio’s Australian shares have fallen 3.7 percent over the past year, underperforming a 6 percent rise in the broader market, as investors shunned miners on fears of cooling growth in China and an expected slump in iron ore prices. However the stock touched an 11-month high on Thursday ahead of the result.

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