Rio’s half-year underlying earnings more than doubled from a year earlier as a massive infrastructure push by China, the world’s top iron ore consumer, and supply problems in Brazil drove prices of the steel-making commodity to record highs earlier this year. [IRONORE/]
“It’s an amazing result, even it is all driven by commodity prices,” said Brenton Saunders, a portfolio manager at Pendal Group, a Rio investor.
Rio, the world’s top producer of iron ore, said the average realised price for the commodity nearly doubled to $168.40 per dry metric tonne free on board from a year earlier.
The price jump helped drive the miner’s underlying earnings to $12.17 billion from $4.75 billion a year earlier, beating a consensus of $12.01 billion from 14 analysts compiled by Vuma.
The company declared a special dividend of $1.85 per share and an interim dividend of $3.76 per share, beating expectations by around 6%, and more than tripling last year’s total payout of $1.55 for the first half.
“We expect another sizable dividend from Rio in 2H (the second half) as well. The capital return story here is compelling,” Jefferies analysts said in a note.
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