Rio Tinto Posts Worst Profit Since 2004 as New CEO Starts – by Jesse Riseborough, David Stringer and Rebecca Keenan (Bloomberg News – August 3, 2016)

Rio Tinto Group reported its worst profit since 2004 as depressed prices for iron ore, aluminum and copper eroded earnings at the world’s second-biggest mining company.

Underlying profit fell 47 percent to $1.56 billion in the six months through June, compared with $2.92 billion a year earlier, London-based Rio said in a statement on Wednesday. That matched the $1.56 billion average estimate from seven analysts surveyed by Bloomberg. The dividend fell 58 percent to 45 cents a share, reflecting a new policy that ties the payment to earnings.

The 143-year-old mining giant has cut costs, reined in spending and sold underperforming assets in a bid to weather the commodities crisis sparked by China’s slowing growth and a glut of raw materials.

The company is led by new Chief Executive Officer Jean Sebastien Jacques, 44, who was head of Rio’s copper unit before taking on the top job from Sam Walsh last month.

“It’s not a bad result given the turbulent backdrop that we’ve seen with commodity prices,” said David Lennox, a resource analyst at Sydney-based Fat Prophets. “The start of the second half has been a little better than the first, so if that continues it may be that the first-half results mark a low point in earnings.”

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