Rio Tinto’s first-half underlying earnings fell to their lowest in three years as easing iron ore prices offset an uptick in shipments from its Pilbara operations, it said on Wednesday, while also announcing a dividend cut.
Iron ore accounts for 70% of Rio Tinto’s profit and prices for the raw material used to make steel could improve going forward as Beijing has pledged to roll out more policies to boost growth after the world’s second-largest economy struggled with an uneven recovery in the first half of the year.
Rio, the world’s biggest iron ore producer, was cautiously optimistic on China’s economy over the rest of the year, CEO Jacob Stausholm said.
“Our experience with China is that if things are going less well, then the Chinese have a quite impressive ability to also manage the economy,” he said.
Rio reported underlying earnings of $5.7bn for the six months to end-June, lower than last year’s $8.63bn and a consensus of $5.85bn, according to Visible Alpha.
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