SYDNEY: Mining giant Rio Tinto said its underlying earnings dived to their lowest point for a decade in the first half on Wednesday, hit by weak commodity prices, even as its net profits surged.
Underlying profits— investors’ preferred measure—at the world’s second-biggest miner fell 47 percent from a year earlier to $1.56 billion in the six months through June.
The results were the lowest since 2004, according to Bloomberg News, and broadly in line with analysts’ expectations.
They are the first delivered under new chief executive, Frenchman Jean-Sebastien Jacques, who took over from Sam Walsh last month.
Jacques said the miner was focused on delivering value to shareholders, which includes cost-cutting, amid a backdrop of “continued volatility and lower commodity prices”.
The cuts helped net profit more than double to $1.71 billion in the six months to June 30, up from $806 million in the corresponding period last year.
Capital spending for the six months dropped significantly to $1.32 billion, while net debt fell six percent to $12.9 billion.
Raw material prices have suffered amid a supply glut due to slowing demand from China, world’s largest commodities consumer.
Prices for oil and metals such as steel-making ingredient iron ore have tumbled, and Rio said “continued caution” was required in the second-half of this year as global growth slows.
Shares in Rio closed flat in Sydney at Aus$49.42 ahead of the result.
In February, Rio posted an annual net loss of $866 million and announced further cuts to costs and capital expenditure.
Rio declared an interim dividend of 45 US cents for the first-half, a 58 percent drop from last year.