London - Anglo-Australian mining giant Rio Tinto on Thursday announced a 43% jump in in full-year net profit to a record $7.44bn and forecast continued strong demand for commodities.
The figure was slightly higher than market forecasts for $7.4bn and compared with the $5.22bn net profit notched-up in 2005.
Rio Tinto shares in mid-day trade in London were showing a 0.92% gain at 2 745 pence.
The results announcement in Melbourne was made after the final bell at Australian Stock Exchange, where Rio Tinto shares rose Aus$1.69 or 2.21% to $78.29 in anticipation of strong figures.
Rio Tinto chairperson Paul Skinner said the global economy was likely to slow in 2007 but demand for commodities would remain strong, particularly from the rapidly-expanding Chinese economy.
Global economy uncertainties
Skinner said: "Looking to 2007, there are a number of uncertainties in the global economy, not least the direction of inflation and interest rates in major economies.
"We expect some moderation of global economic growth, although confidence in Japan and Europe is increasing.
"Growth in China, which is critical to the demand outlook for many of our products, remains strong and well balanced.
"We continue to view the overall outlook for commodities as positive, with prices remaining well above their long-run averages in 2007."
In broker comment here Merrill Lynch said the company's plans to pay a full-year ordinary dividend of 104USc should be well received by the market.
A headwind
Merill Lynch also noted that further risk to the downside in base metal prices would likely act as "a headwind", preventing Rio from outperforming.
Brokers Cazenove described Rio Tinto's earnings figures as decent.
Skinner, Rio Tinto chairperson, also announced that chief executive Leigh Clifford would be replaced by group resources director Tom Albanese in May this year.
"We have planned for an orderly succession and are confident that, with a strong executive leadership team, we will retain momentum in pursuing Rio Tinto's long-term strategy of delivering value to shareholders," he said.
Record production
Clifford said the results were underpinned by record production levels.
"In 2006, the group achieved record production volumes in a number of products, including iron ore, alumina, US coal and molybdenum," he said.
"Operations generally recovered well from the effect of adverse weather conditions early in the year, particularly the cyclones which hit northern Australia."
Rio Tinto said rising commodity prices had boosted the bottom line by more than three billion dollars last year, with average copper prices up 84% on 2005, aluminium 35% and iron ore 19%.
The company moved to take advantage of high demand for iron ore by announcing an 860 million expansion of facilities at the Cape Lambert port it part owns in northern Australia.
The expansion will allow the port to ship 80 million tonnes of iron ore a year, up from 55 million.
Underlying earnings from iron ore rose to $2.28bn from 1.72 billion dollars in 2005, copper earned $3.56bn, up from $2.02bn, aluminium $746m, while the energy unit, which includes Rio Tinto Coal, fell $22m to $711m.
Rio Tinto said said growth opportunities for 2007 had been enhanced by a joint-venture for exploration in Russia and investment in a copper project in Mongolia.
It said a $4bn share buyback had been completed almost a year ahead of schedule and announced the full-year ordinary dividend would rise 30% to 104USc.