Rio Tinto chief executive J-S Jacques said: 'Rio Tinto has generated net cash from operating activities of $3.2 billion and reported underlying earnings of $1.6 billion, against a backdrop of continued volatility and lower commodity prices.

'We focus on delivering value to shareholders. This focus is unrelenting, with further cost reductions achieved in the half and EBITDA margins of 33 per cent. With our strong operating cash flows, tight control over capital expenditure and progress on divestments, the balance sheet remains robust. Having paid the 2015 final dividend of $1.9 billion in April 2016, we reduced net debt during the half to $12.9 billion.

'Our balance sheet strength and Tier 1 assets provide a stable foundation in these uncertain and volatile markets, which is fundamental in a cyclical and capital-intensive industry. We will generate cash at every opportunity, which we will then allocate in a disciplined way to deliver returns to shareholders, while also investing in compelling growth.

'The board, today, has announced an interim dividend of 45 US cents per share, consistent with our commitment to no less than 110 US cents per share for the full year.'

The financial results are prepared in accordance with IFRS and are unaudited. To allow production numbers to be compared on a like-for-like basis, production from asset divestments completed in 2015 have been excluded from the Rio Tinto share of production data but assets sold in 2016 remain in the comparative.
Underlying earnings is a key financial performance indicator which management uses internally to assess performance. It is presented here to provide greater understanding of the underlying business performance of the Group's operations. Net and underlying earnings relate to profit attributable to the owners of Rio Tinto. Underlying earnings is defined and reconciled to net earnings on page 61.
Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment.
Net debt is defined and reconciled to the balance sheet on page 44.
Gearing ratio is defined as net debt divided by the sum of net debt and total equity at each period end.
These financial performance indicators are those which management use internally to assess performance, and therefore are considered relevant to users of the accounts.