Rio Tinto Raises Dividend on Strength in Iron Ore

Andrew Cummings
July 31, 2020

Pretax profit was up 1.7% at USD5.28 billion compared to last year's first half of USD5.19 billion.

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

"Commodity prices will be driven by the shape of the global economic recovery, but Rio is well placed to cope with whatever comes next, given its strong finances and high quality asset base".

Shares of the company are now more than 1% up on Wednesday.


At £2.56 billion, the world's 2 largest metals and mining corporation said that its net profit in H1 came in significantly lower than £3.18 billion in the same period previous year.

That rebound helped it report half-year underlying earnings of $4.75 billion, beating a consensus of $4.36 billion from 16 analysts compiled by Vuma.

Profits before tax of US$5.3bn were up nearly 2% while underlying profits (EBITDA) fell 6% to US$9.6bn.

Rio Tinto closed out Thursday's session up 1.06% at $104.50 per share.


Bloomberg said that even with most of the legal disputes out of the way, Rio Tinto must decide whether it's prepared to spend the large amounts needed to extract and transport the super-rich ore from its part of the project.

Elsewhere, RIO's management guided for the following 2020 production outcomes, including: Pilbara iron ore shipments (100% basis) of between 324-334 million tonnes; mined copper production of between 475-520 kilotonnes; refined copper production of between 165-205 kilotonnes; alumina production of between 7.8-8.2 million tonnes; and aluminium production of between 3.1-3.3 million tonnes.

Rio Tinto's boss has described his company's COVID-19 performance as "resilient", but one analyst is labelling it "exceptional", despite a 20 per cent profit fall. Demand in the Asian nation has remained strong, Rio said in the statement on Wednesday.The producer is working with partners to "reduce capital intensity, lower operating costs and shorten the timetable for development" of the high-grade Simandou iron ore project in Guinea, Rio said. In other news, Lancashire also revealed to have swung to a loss on Wednesday.

Rio Tinto tips Chinese growth to be up 8% next year, fuelling demand for Australian iron ore. At the time of writing, the Anglo-Australian multinational mining corporation has a market cap of £60.22 billion and a price to earnings ratio of 12.80.


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