Rio Tinto looks set to deliver a "material increase" to shareholder returns within the next year, after unveiling a set of half-year results that were far better than expected. The $US5. 1 billion underlying profit for the first half of 2014, announced on Thursday, was well ahead of the $US4. 56 billion analysts had expected, but it was the much lower spend on capital projects and reductions to the operating cost base that really pleased investors.
Mr Radclyffe said it was encouraging to see Rio show discipline on the spending front, but the $US5. 1 billion underlying profit had been helped by the lower-than-expected spend on tax. "Clearly the tax rate was lower than everyone expected and that is what has been the driver of the better earnings number.
Mr Walsh has said he wants to get net debt down to about $US15 billion before conducting a major round of shareholder returns, and Thursdayâ€™s result had net debt at $US16. 1 billion. "A strong foundation is in place for material increases in cash returns to shareholders following a reduction in net debt of $US6 billion over the past year," the company said in its statement to the ASX.
Read more here: SMH