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Rio Tinto plans US$2b buyback as H2 profit dives
[MELBOURNE] Global miner Rio Tinto said it would return US$2 billion (S$2.7 billion) to shareholders through a buyback despite reporting a 30 per cent slide in second-half profit on Thursday, its worst half year profit in two years.
The world No 2 miner has been under pressure to please investors to ward off a fresh takeover approach from rival Glencore Plc, despite a slump in the price of its biggest earner iron ore.
"With lower commodity prices and uncertain global economic trends, the operating environment remains tough. However, in these conditions, Rio Tinto's qualities and competitive advantages deliver superior value," chief executive Sam Walsh said in a statement.
Underlying earnings for the six months to Dec 31 fell to US$4.19 billion from US$5.99 billion a year earlier, based on Reuters calculations off the full-year result. This was well above analysts' forecasts of US$3.76 billion.
Rio Tinto's Australian shares have fallen 10.3 per cent over the past year against a 9.8 per cent rise in the broader market, but have outperformed rival BHP Billiton, which has been hammered by a slump in oil prices along with iron ore.