Rio Tinto profit falls but dividend increases amid ‘exceptional performance’

Rio Tinto share price gains 1% on strong earnings July 2020

Rio Tinto said its net debt totaled $4.83 billion at the end of June, down from $12.90 billion four years ago, as the Anglo-Australian company preferred higher shareholder returns over the heavy investments of previous commodity cycles.

Shares of Rio Tinto PLC (LON: RIO) gained 1.5% today after the mining giant reported better-than-expected first-half profit.

Underlying earnings from iron ore, which typically accounts for about 80 per cent of Rio's earnings, gained 1 per cent to $US4.56 billion ($A6.35 billion) in the half-year, and shipments rose three per cent.

Iron ore pellets and concentrates production in the six months to June 30 were up 6% on a year prior at 5.3 million tonnes versus 5.0 million tonnes.

Rio Tinto nevertheless bumped up its interim dividend by 3% to 155c per share.

"Rio's resilience and the very strong balance sheet supports the small increase in the dividend", said Richard Marwood, senior fund manager at Royal London Asset Management, which holds shares in the miner. The company signalled uneven global recovery last week.

Rio Tinto share price gained around 1.5% on the latest results.


RIO Tinto CEO, Jean-Sebastien Jacques, reiterated his group's interest in seeing how it could participate in the development of Simandou, an iron ore deposit which has been the subject of legal action for years, preventing its development.

"We are having a lot of private conversations for all our smelters in Aus".

"We will look at all options because it is an infrastructure project and scale is important", Jacques said.

Free cash flow tumbled 28% as the miner spent more on development projects and tax payments, but analysts at Jefferies remained upbeat about its prospects.

"We have continued to pay the same level of taxes, same level of employment, the same dividend", Chief Financial Officer Jakob Stausholm told Reuters.

Jacques said he will front an Australian Senate enquiry next week over Rio's destruction of two sacred caves of historic significance in Western Australia.

A separate Simandou venture about 70 kilometers (44 miles) to the north, could be up and running within five years, producing about 60 million tons a year in an initial stage, according to Societe Miniere de Boke, part of a consortium with Singapore's Winning Shipping Ltd. and Guinea's government.

Related:

Comments

Latest news

Facebook surge leads tech megacaps higher, but Alphabet stumbles
The Dow Jones Industrial Average added 0.1 per cent to 26,345.83, while the broad-based S&P 500 climbed 0.3 per cent to 3,255.84. The results drove at least 27 Wall Street analysts to rethink their price targets of the giant, as reported by MarketWatch.

Barack and Michelle Obama speak in new Spotify podcast
Because once you do those things, I think you'll have a better sense of your community, your country, and yourselves. The couple talked about community and what it means to them at this moment in history.

World Snooker Championship hit by Boris Johnson backtrack on fans
He said this would mean "a greater police presence to ensure face coverings are being worn where this is required". However, he warned it was important to keep up "discipline and our focus".

Johnny Depp a violent misogynist, court told
Earlier, Sherborne had referred to evidence given by Heard that Depp had thrown his former girlfriend Kate Moss down the stairs. Some legal experts say Depp's reputation will have trouble recovering, even if The Sun is forced to retract its claim.

Brazil's 1st lady infected with COVID-19
I have mold in my lungs, ' he said, referring to almost three weeks he spent at the official presidential residence. I was a bit weak yesterday. "Now I'm on antibiotics", Bolsonaro said in a livestream video.

Other news