Rio Tinto chief executive Sam Walsh said “This is a robust set of results, given the tough operating environment. Tier one assets and sound operating capability have delivered stable margins with underlying earnings of $2.9 billion during the half. Post-tax operating cash flows of $4.4 billion more than covered our sustaining capital expenditure of $1.2 billion and dividend payments of $2.2 billion.
“A continued focus on financial and operating discipline delivered first half cost savings of $641 million, representing 85 per cent of our original full year target, which we have now increased to $1.0 billion. We continue to invest in growth, and have reached key milestones in three of our growth projects with the expansion of our Pilbara iron ore infrastructure, first production from our expanded Kitimat aluminium smelter and an agreement to progress the development of the Oyu Tolgoi underground copper mine.
“The early and decisive actions we started taking in 2013 provide a strong base for the business. Our low level of absolute net debt and gearing allow us to maintain our commitment to capital returns in 2015, with
$3.2 billion returned to shareholders in the first half through our progressive dividend and ongoing share buy-back programme. I am pleased to announce an increase in our interim dividend of 12 per cent, in line with our established dividend policy. I should like to thank all of my colleagues for their exceptional efforts in achieving these results. Rio Tinto is well placed to succeed in these volatile times, and we will use our competitive advantages for the benefit of all our stakeholders.”
|Six months to 30 June
|Underlying earnings1 (US$ millions)
|Net earnings1 (US$ millions)
|Net cash generated from operating activities (US$ millions)
|Capital expenditure2 (US$ millions)
|Underlying earnings per share (US cents)
|Basic earnings per share (US cents)
|Ordinary dividends per share (US cents)
||At 30 June
||At 31 Dec
|Net debt3 (US$ millions)
The financial results are prepared in accordance with IFRS and are unaudited. To allow production numbers to be compared on a like-for-like basis, production from asset divestments completed in 2014 have been excluded from Rio Tinto share of production data but assets sold in 2015 remain in comparisons.
1Underlying earnings is the key financial performance indicator which management uses internally to assess performance. It is presented here to provide greater understanding of the underlying business performance of the Group’s operations. Net and underlying earnings relate to profit attributable to the owners of Rio Tinto. Underlying earnings is defined and reconciled to net earnings on page 57.
2Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment.
3Net debt is defined and reconciled to the balance sheet on page 40.
4Gearing ratio is defined as net debt divided by the sum of net debt and total equity at each period end.