Rio Tinto once again beats market expectations while keeping costs under control
· Rio Tinto reported a strong set of half year numbers today, after shipping record volumes of iron ore and increased production of copper in Mongolia and Utah.
· Rio Tinto is still the lowest cost iron ore producer within WA’s Pilbara region with an average unit cost over the 1H14 of US$20.40 a dry tonne, while reporting an average realised iron ore price of US$99 per dry tonne.
· RIO increased cash flows from operations by 8% to US$8.7Billion, while reducing capital expenditure (CAPEX) to US$3.576Billion, down 48%, in the 1H14. The slide was in line was even greater than expected even with the knowledge that RIO had wound back some of its less viable projects. RIO now expects its FY14 CAPEX to hit US$9Billion and its FY15 CAPEX to reduce to US$8Billion.
· RIO did not announce a share buyback today but the company did say “it has a strong foundation for higher cash returns to shareholders”
· RIO will pay a 1H dividend of US$0.96 payable on 11th of September 2014