Rio Tinto's first half profits plunge 65 percent
21 August 2009
Mining giant Rio Tinto's first-half profit plunged by a massive 65 per cent as the global commodities prices experienced the worst crash in more than five decades due to the global economic downturn.
With commodities prices plunging globally, the world's third-largest mining group posted a first-half net profit of $ 2.45 billion, compared to $ $6.95 billion a year ago, shearing $4.5 billion off its earnings.
Revenue dropped 31 per cent to $18.85 billion from a restated $27.19 billion last year.
However, Rio Tinto achieved operating cost savings of $0.8 billion in first half of 2009 and said it was on track to achieve $2.5 billion worth of savings by 2010.
Its 2007 acquisition for of Canadian aluminium company Alcan for $38 billion, (See: Update: Alcan to merge with Rio Tinto under $38.1 billion deal) bought more bad news for the debt ridden company as it posted a half year loss of $689 million compared to a $1 billion profit in the same period last year.
Alcan would have added another $342 million to its first half loss if not for the aggressive cost-cutting measures undertaken by the company at the beginning of the year.