Despite 12% surge in half-year underlying earnings, mining giant failed to impress investors and traders today.
The figure of $4.416 billion in the six months to June 30 compared with $3.941 billion during the same period last year.
Higher prices for aluminium and copper bolstered what chief executive J-S Jacques described as “another strong set of results”.
“Superior shareholder returns”
But even the news of bumper returns to shareholders in the shape of dividends and share buy-backs could not stop a tumble in the stock price, which was down 4.16% in morning trading in London, registering a drop of 174.75p to 4,021.75p.
Baseline earnings per share, in US cents, rose 37% to 251.6 cents from 184 cents last time, and the dividend per share rose 15% to 127 cents from 110 cents during the same period last year.
“In addition, in 2018 we have announced $5 billion of divestments. The board has approved that these disposal proceeds, net of tax, will be returned to our shareholders, with the precise timing and form to be determined.”
The interim dividend announced today “represents 50% of underlying earnings”, said Rio Tinto, adding that the additional share buy-backs announced today would be completed by the end of February next year.
The figure for underlying earnings excludes a number of items including impairment charges, net gains or losses on the consolidation or sale of interests in other businesses, and gains or losses on .
Iron ore earnings down, copper and diamonds up
Fewer exclusions apply to the underlying figure for earnings before interest, tax, depreciation and amortisation (EBITDA), these last two items referring to the reduction in value over time of physical, and intangible assets, respectively. Underlying EBITDA showed a more modest rise, of 2% against the first half of 2017, but the headline figures were considerably bigger than those for underlying earnings, $9.042 billion during the first half of last year and $9.198 billion in the six months to the end of June.
This divestment in Coal & Allied Industries refers to a complete sale of the subsidiary, previously wholly-owned by Rio Tinto.
Underlying earnings in iron ore fell 1% to $3.222 billion from $3.225 billion while aluminium contributed a 15% rise in underlying earnings from $759 million to $871 million.
In copper and diamonds, negative underlying earnings of $69 million last time were turned into a positive figure of $450 million, but underlying earnings were down in energy and minerals, where a 27% decline took the figure from $652 million in the first half of 2017 to $473 million.
In “other operations” there was a 97% decline from losses of $34 million last time to $67 million in the six months to June.