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Kennecott owner Rio Tinto posts record profit
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Rio Tinto, the global mining company that owns the Kennecott operations in Utah, posted record first-half profit Tuesday, bolstering its effort to fend off a hostile takeover by BHP Billiton.

Rio Tinto said the results had been lifted by booming demand for iron ore from steel makers in Asia and by the acquisition of the Canadian company Alcan for $38 billion in October.

Net income more than doubled in the period to $6.9 billion from $3.3 billion a year earlier. Revenue rose to $27.2 billion from $12.1 billion. Rio Tinto also raised its interim dividend by 31 percent to 68 cents.

The results Tuesday showed Rio Tinto's revenue from aluminum operations soared to $12.6 billion from $1.8 billion. The company did not break out the contribution of the Alcan deal to profit, but the chief executive, Thomas Albanese, said in a telephone interview that the acquisition had been ''accretive to profit in the first half'' and that ''we haven't seen the full benefits of the acquisition yet.''

Rio Tinto's underlying earnings, which exclude interest and taxes, rose to $5.5 billion in the first half from $3.53 billion in the period a year earlier. Analysts polled by Reuters Estimates had, on average, expected underlying earnings of $5.1 billion.

Shares of Rio Tinto, which have risen more than 54 percent in the last year, were down 0.56 percent, to 51.50 pounds, or about $95.80, in London.

The declines were part of a broad fall in mining stocks as commodity prices slipped. Baoshan Iron and Steel, the largest Chinese steel maker, said it would cut prices for some steel products on expectations that demand from automakers and appliance makers would slow. Resource company investors are concerned that the slowdown in the global economy will weigh on raw materials prices.

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