6th Aug 2015 06:47
LONDON (Alliance News) - Rio Tinto PLC Thursday said the fall in world commodity prices caused its earnings to drop by around USD3.60 billion in the first half of 2015, but the miner still reported results that beat analyst expectations.
The FTSE 100-listed miner reported a pretax profit of USD1.74 billion in the first half of 2015, less than a third of the USD6.09 billion profit made a year earlier, as revenue fell to USD17.98 billion from USD24.33 billion.
Pretax profit before finance costs came in at USD3.66 billion, also considerably down from the USD5.88 billion profit a year earlier.
Earnings before exceptional items fell to USD2.92 billion in the first half of 2015, compared to USD5.11 billion. That beat analyst expectations, which were expecting earnings to come in at around USD2.43 billion, according to a consensus provided by the company.
Rio Tinto said the fall in commodity prices in the first half of 2015 decreased its earnings before exceptional items by USD3.62 billion compared to a year earlier.
Despite the dramatic fall in earnings, Rio Tinto stuck with its progressive dividend policy, increasing the interim dividend by 12% to 107.5 cents per share from 96.0 cents per share.
Rio Tinto also said it will progress with its share buy-back programme, and said it will purchase USD1.0 billion of shares in the second half of 2015.
Looking toward the second half of the year, Rio Tinto said it now expects its operating cash cost for the full year to total around USD1.0 billion, compared to its previous guidance of USD750 million.
However, capital expenditure in 2015 is expected to fall to around USD5.50 billion, and the miner said it will be less than USD6.0 billion in 2016. Capital expenditure for 2017 is expected to remain at USD7.0 billion. For all three of those years, sustaining capital expenditure is expected to make up around USD2.50 billion of the budgets.
By Joshua Warner; [email protected]; @JoshAlliance
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