Rio Tinto Profit Falls Short Due to Rising Costs
Mining giant Rio Tinto has announced a profit of A$7.3 billion for the first half of the year, thanks to continued iron ore demand from China, but still falling short of analysts’ estimates. The company also reported an increase of its share buyback by US$2 billion to US$7 billion. Still, according to Bloomberg, “Underlying profit rose 35 percent to $7.8 billion, below the $8.3 billion mean estimate of nine analysts compiled by increases.”
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Rio Tinto said increased energy costs cut earnings by $95 million, increases in input costs decreased income by $384 million and severe weather in Australia during the period also drove up expenses and trimmed $245 million off earnings.
Chairman Jan du Plessis said “Rio Tinto has produced another set of record-breaking results. Market conditions have remained favourable over the past six months due to strong Asian demand, although the volatile economic environment that we highlighted eighteen months ago continues to exist, driven by significant macro economic imbalances.”