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Rio Tinto doubles H1 profit

service@ironoreteam.comWed Aug 2, 2017 02:03pm GMT
Global miner Rio Tinto more than doubled its first-half profit buoyed by Chinese iron ore demand and rewarded shareholders with a record interim dividend and $1 billion (756.47 million pounds) in share buybacks.
Underlying earnings for the six months to June 30 of $3.94 billion missed forecasts for $4.19 billion, according to Thomson Reuters I/B/E/S, but were well above last year's $1.56 billion following a recovery in iron ore and other commodity prices.
Rio Tinto declared a record-high half-year dividend of $1.10 a share, equivalent to $2 billion, up from 45 cents a share a year ago. The latest buyback comes on top of a $500 million programme announced in February.
"The Chinese economy has performed well in 2017 and the outlook signs for 2018 are positive," Chief Executive Jean-Sebastien Jacques told reporters. "Beyond China, global economies have both improved in Europe and the U.S."
Rio's London-listed shares were trading down 3 percent by 1340 GMT, with analysts citing some disappointment over the miss in earnings, linked to the cost of paying down debt early.
The dip follows a nearly 9 percent rally in July as the market anticipated Rio's results and analysts said the company looked strong.
"We still see upside in Rio Tinto, while the company offers some downside protection as well with the robustness of its balance sheet and top quality of its assets," Bernstein analysts said in a note.