Rio Interim Profits Expected at $7.3B

Tomorrow's interim earnings season kicks off with reporting from Rio Tinto and analysts are overwhelmingly gunning for a 39.1 percent boost in underlying profit from US$5.77 billion to US$8.03 billion.

Rio is expected to announce a $7.3 billion first half net profit culled from its iron ore, aluminium and copper divisions. 80 percent of the net profit is expected to come from the robust iron ore division, a 50 percent jump from last year’s US$6.2 billion.

China's demand for iron ore is the driving force behind the mining giant's Pilbara expansion project, where production capacity will be boosted to 333 million tonnes per year from 220 million tonnes by 2015.

Analyst UBS Investment Research forecast Rio's iron ore and aluminium divisions to improve in underlying earnings but expects a 42 percent drop in profits for the weak energy division.

UBS also expects aluminium to contribute around $468 million in net profit, a 26 per cent increase from the previous year. The analyst pegged Rio's share price target at $114 and interim dividend at US 54 cents per share.

High labour costs, the rising Australian dollar and extreme weather affected the miners operations and will have cut profits.