Rio Tinto chief Sam Walsh says chairman’s dual role proof of a turnaround
Rio Tinto’s chief executive Sam Walsh yesterday said that chairman Jan du Plessis’ appointment at brewing giant SABMiller would not have been possible in previous years and used it as evidence of the mining company’s improved performance.
Du Plessis will be chairman of both FTSE 100 companies from next year, sparking criticism from investor group Pirc that he would be too stretched to fulfil his duties properly.
“The adults are running the show now. Everything has quietened down and the company is running smoothly,” Walsh told City PM “It would not have worked a few years ago.”
Walsh’s comments coincided with better-than-expected half-year results that showed a 21 per cent rise in underlying earnings to $5.12bn (£3.04bn), while net debt fell by $1.9bn to $16.1bn. Rio Tinto has been reducing costs and streamlining its portfolio to bolster its balance sheet amid weak commodities prices.
It has made $3.2bn of savings since 2012 and expects to make a further $1bn by the end of 2015. It lowered its full-year spending target by $2bn to around $9bn and will maintained it around $8bn from 2015 onwards.
Last month Rio Tinto sold its Mozambique coal assets for the knock-down price of $50m, marking the end of former boss Tom Albanese’s misjudged acquisition spree just before the end of the commodities boom.
“We wanted to close the door on the project and $50m was the best we could get,” said Walsh.
Shares rose in the morning but closed 0.5 per cent lower at 3373p.