Rio Tinto net earnings fell by 82% from USD 4.4 billion to USD 806 million in the six months to 30 June. At the same time, the company’s net debt rose 10% to USD13.7 billion, according to the 2015 interim results released today.
Chief executive officer Sam Walsh described the outcome as “robust” given the “tough operating environment”. Walsh pointed to underlying earnings of USD2.9 billion and post-tax operating cash flows of USD4.4 billion.
Iron ore underlying earnings reflected lower prices dropping 55% from USD4.7 billion for 1H14 to USD2.1 billion in to 1H15.
The company said its global production of 154 million tonnes was 11% higher than in the first half of 2014 following a ramp up in Pilbara production.
Related news:Rio Tinto iron ore shipments up 17%
“As expected at the start of the year, the macro environment and commodity outlook facing the mining industry has been challenging,” the company reported. “Commodity prices are under pressure, in some cases falling to levels not seen since 2009 in the aftermath of the Global Financial Crisis.”
The company said it expected the weakness was cyclical and would pass as global economic growth picks up and commodity prices rebalance.
“We continue to project long-term growth in Chinese crude steel production, reaching around 1 billion tonnes towards 2030,” the company forecast.