Rio Tinto (ASX:RIO) delivered a flat result for the six months to June and maintained its interim dividend for shareholders despite stronger copper returns.
However, the market may react negatively as the figures fell short of analyst expectations.
The interim dividend remained steady at US$1.77 per share after sales revenue edged up 1% to US$26.802 billion. Underlying EBITDA increased 3% to US$12.093 billion, and underlying earnings rose 15% to US$5.8 billion. These figures were slightly below forecasts of US$12.4 to US$12.5 billion for underlying EBITDA and a US$1.79 per share interim dividend.
Copper EBITDA surged 67% to US$1.8 billion during the half-year, while aluminium EBITDA climbed 38% to US$1.6 billion. Minerals EBITDA remained flat at US$700 million.
Iron ore EBITDA declined 10% to US$8.8 billion due to slightly weaker prices and weak Chinese demand, despite remaining Rio's primary revenue source. Iron ore and copper prices have fallen since June 30, indicating a potential continuation of similar performance in the next half-year.
The fully franked interim dividend of US$1.77 per share represents a 50% payout and will absorb US$2.9 billion.
Rio Tinto CEO, Jakob Staushol, expressed satisfaction with the half-year performance, highlighting the company’s consistent profitability and growth driven by disciplined investments. He emphasized the company's focus on strengthening operations and advancing major projects for profitable organic growth.
Overall copper equivalent production is on track for a 2% increase this year, with an ambition to achieve around 3% compound annual growth from 2024 to 2028 through existing operations and projects.
Staushol described reaching an "inflection point" in the company's growth, pointing to improvements in the aluminium business, consistent production at Pilbara iron ore operations, growing cash flow from the Oyu Tolgoi underground copper mine, and anticipated value from the Simandou investment and Rincon lithium project. He also highlighted the company's technological advancements and partnerships, such as renewable power solutions for Boyne and NZAS.
Rio Tinto confirmed that its production guidance for 2024 remains unchanged.
