RIO TINTO

Rio Tinto

Rio Tinto

Answer-1

Rio Tinto has given the best perfomance in the sector, with a 75% increase in net earnings to $3.8 billion (China accounting for 30% of the group's revenues) . The first half of 2008 represented an upward surge in the group's perfomance and earnings

USD (millions)

Year

2006

2007

2008

2007 vs 2008 (%)

Consolidated revenue

22,465

29,700

54,264

Income (Operating profit)

8,974

8,571

10,194

Net earnings (billions)

3,253

6,914

113%

Rio's profit more than doubled to $6.91 billion, or $5.39 a share, from $3.25 billion, or $2.51 cents a share, in the first half of 2008. Also experiencing more than a doubling was the revenue -- up by 124% to $27.2 billion from $12.1 billion .

Despite a sharp decline in industrial output during the second half of 2008, with many metals markets have entering 2009 with prices at their lowest level in several years -- Rio Tinto's first-half 2008 results showed unprecedented levels, Some of the highlights were:

Record underlying earnings* of $5,474 million, 55 per cent above first half 2007

Record net earnings* of $6,914 million, 113 per cent above first half 2007

Cash flow from operations up 54 per cent to a record of $8,860 million - a run rate of approximately $1.5 billion of cash flow per month.

Half year production records achieved in iron ore, bauxite, alumina, aluminium, borates, titanium dioxide and thermal coal

Interim dividend increased 31 per cent to 68 US cents

USD (millions) Year 2006 2007 2008 2007 vs 2008 (%) Consolidated revenue 22,465 29,700 54,264 Income (Operating profit) 8,974 8,571 10,194 Net earnings (billions) 3,253 6,914 113%

Rio Tinto's rival, BHP Billiton (BHP) , the biggest mining company in the world, tabled a merger bid for Rio Tinto on 8 November 2007 - sparking what would be one of the highly publicized takeover attempts in the history of the sector.

BHP Billiton (BHP) asserted that Rio would contribute approximately 36% of profit and with 64% coming off BHP Billiton (BHP) 's block. Under the proposed deal, he says Rio investors would get a larger payout relative to what the company produces in profits. Investors were promised a 44% return, that is the swap of 3.4 BHP shares for each Rio share BHP Billiton (BHP) also argued that a combined group would cut inefficiencies - while its own profitable petroleum business would act as a counter to falling commodity prices because of its independence on from other metals

The Rio Tinto group rejected BHP Billiton (BHP) 's bid to create a mining giant worth 350bn (£168bn) because their rival's offer because it "undervalued" them. A subsequent hostile takeover attempt by BHP Billiton (BHP), which valued Rio Tinto (RTP) at $147 billion, met the same fate. Rio asserted that the offer was not in the best interest of shareholders, and their "world class portfolio of assets put it in a position to succeed in the mining cycles. They also claimed that doubling net profits for the first half of 2008 were evidence that they were worth more than what BHP Billiton (BHP) offered

The unsolicitated takeover ...