Global resources group Rio Tinto said on Tuesday that rival BHP Billiton’s pre-conditional offer to acquire all the shares in Rio Tinto has now been referred to a second phase review by European Union competition authorities.
“Our boards rejected this offer on the basis that it undervalued the company and its prospects and we now await the outcome of the EU and other important regulatory reviews,” said Rio Tinto chairperson Paul Skinner.
“In the meantime, the group’s performance in the first half, together with our growth potential, supports the boards’ view that Rio Tinto presents a very strong stand-alone value proposition for shareholders,” he said.
The group reported a 55% increase in its half-year underlying earnings to $5,5-billion, which it said clearly demonstrates the quality of Rio Tinto’s portfolio and the strength of its existing markets, operations and management.
It reported record underlying EBITDA (earnings before interest, taxes, depreciation and amortisation) of $11,4-billion — up 73% compared with the first half of 2007. It also reported record net earnings of $6,914-billion, 113% above the first half of 2007.
Cash flow from operations was up 54% to a record of $8,86-billion — a run rate of approximately $1,5-billion of cash flow per month.
Half-year production records were achieved in iron ore, bauxite, alumina, aluminium, borates, titanium dioxide and thermal coal on a like-for-like basis.
“The group continues to perform strongly, and the outlook remains positive,” Skinner said. — I-Net Bridge