Rio Tinto Says Full-Year Profit Increased 10% on Cost Savings

Rio Tinto Group, the world’s second-largest mining company, said profit rose 10 percent last year, beating analyst estimates as a $2 billion cost-cutting plan bolstered profitability.

Underlying profit was $10.2 billion, or 553.1 cents a share, from $9.3 billion, or 501.3 cents, a year earlier, London-based Rio said today in a statement. That compares with the $9.7 billion average of 23 analyst estimates compiled by Bloomberg. Net income was $3.7 billion after a loss of $3 billion last year.

Chief Executive Officer Sam Walsh, appointed 13 months ago, has cut costs after investor criticism that the world’s biggest mining companies had overspent on acquisitions and expansions, pushing down commodity prices and curbing profit. Analysts are expecting Rio to bolster returns to shareholders as cost-savings enhance earnings.

“These strong results reflect the progress we are making to transform our business and demonstrate how we are fulfilling our commitments to improve performance, strengthen the balance sheet and deliver greater value for shareholders,” Walsh, a 64-year-old Australian, said today in the statement.

Rio declined 0.4 percent to close at A$67.83 in Sydney trading today. The stock advanced 1.5 percent to 3,510 pence yesterday in London trading. It increased its dividend 15 percent to 192 cents.

The company reported record production of iron ore, bauxite and power station coal for 2013.

Before it's here, it's on the Bloomberg Terminal.