Australian iron ore giant Rio Tinto has announced its financial results for the first half of 2014, posting a net profit of US$4.4 billion in the given period, increasing from a net profit of US$1.7 billion in the same period of the previous year. The company's net debt decreased by $6 billion year on year to $16.1 billion as of June 30, 2014.
Rio Tinto's net profit from its iron ore unit in the first half of the current year amounted to US$4.7 billion, up 10 percent year on year, thanks to record sales volumes in the Pilbara region of Western Australia, cost savings initiatives and a weaker Australian dollar. Rio Tinto's underlying earnings before interest, taxes, depreciation and amortization (EBITDA) for its iron ore unit were six percent higher year on year at US$8.09 billion in the given period.
During the first six months this year, iron ore sales of 142 million mt set a new record and were 20 percent higher than in the first half of the previous year, as Rio Tinto reached a 290 million mt per year run rate in the Pilbara two months ahead of schedule. Sales exceeded production due to the drawdown of stockpiled iron ore inventory built at Pilbara mine sites in previous years to facilitate a ramp-up of the expanded port and rail facilities. In the first half, Rio Tinto's Pilbara mines produced 139.5 million mt of iron ore, also reaching a record.
According to Rio Tinto's statement, in 2014 the company expects global iron ore shipments of approximately 300 million mt. 2014 production is expected to be 295 million mt from Rio Tinto's global operations in Australia and Canada, subject to weather constraints. Around five million mt of iron ore inventory is expected to be drawn down at the Pilbara mines during the year.
