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Date: Tuesday 26 Aug 2008

LONDON (ShareCast) - Bid target Rio Tinto put its best foot forward Tuesday as it announced record underlying earnings for the first half of 2008.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) surged 73% to $11,408m in the first half of 2008 from $6,613m a year earlier.

Underlying earnings, which exclude a $1.48bn profit on disposals, jumped 55% to $5,474m from $3,529m, which the chairman, Paul Skinner, said clearly demonstrated “the quality of Rio Tinto's portfolio and the strength of our existing markets, operations and management.”

Skinner added that the group continues to perform strongly and the outlook remains positive.

The integration of Rio Tinto Alcan is proceeding well and is on course to deliver $1.1bn of post-tax synergies from the end of 2009.

The interim dividend has been bumped up by 31% to $0.68 from $0.52. The board remains committed to increasing the 2008 dividend by at least 20%, with at least a 20% increase scheduled for the 2009 dividend.

“While the equity markets are currently focused on downside risks, we believe there are potential offsets on the upside based on continued strength in commodity demand, low inventory levels and a supply side which continues to face multiple constraints,” Skinner said.

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