Rio Tinto's H1 profit more than doubles to $3.94 bn

Anglo-Australian mining group Rio Tinto has reported a more than 100 per cent increase in its first half profits on the back of rising commodity prices and rewarded shareholders with a record interim dividend of 41.10 per share (or $ 2 billion), against 45 cents in the similar quarter last year.

Underlying earnings of the mining group for the six months ended 30 June 2017 stood at $3.94 billion, against last year's $1.56 billion.

In the six months to June 30, Rio's pre-tax profits jumped 57 per cent to $4.96 bn, while revenue climbed nearly 20 per cent to $19.3 billion.

Net debt fell by $2 billion to $7.6 billion as the miner kept a tight rein on costs.

In addition, Rio Tinto said it will double its current $500 million share buyback scheme, so that it will have acquired $1 billion of its own shares by the end of 2017.

Together, the bumper dividend and the additional share buyback will involve a total of $2.5 billion (£1.9bn).

The latest buyback comes on top of a $500 million program announced by the FTSE 100 group company in February.

Shareholder returns amount to around 75 per cent of underlying earnings in the first half of the year, the company said.

The uptick comes after a two-year downturn that blighted the mining industry between 2014 and 2015.

Much of Rio Tinto's revenues came from stronger prices for iron ore that makes up the bulk of sales largely to China.

If the commodity price trend continues, Rio investors can expect another bonanza later this year, once the company finalises the $2.7bn sale of its coal mines in Australia to China-backed Yancoal.

Jean-Sebastien Jacques, chief executive, said, ''By driving performance, focusing on cash and allocating it with discipline we are delivering superior cash returns to our shareholders.

"These are strong results: operating cash flow was $6.3bn and we met our $2bn cash cost reduction target six months early.

''We are now shifting gear to focus on the untapped value from our productivity programme and continue to strengthen our portfolio to build higher returns for the future.''

Besides, he said, the Chinese economy has performed well in 2017 and the outlook signs for 2018 are positive, adding, "Beyond China, global economies have both improved in Europe and the US."

Rio's stock, however, was down 2.3 per cent in London in early trade at £34.19 after its earnings before interest, tax, depreciation and amortisation fell slightly short of expectations at $9 billion.