Rio Tinto’s board declares £1.20 a share of interim dividend

Written by: Wajeeh Khan
July 29, 2020
  • Rio Tinto’s board declares £1.20 a share of interim dividend on Wednesday.
  • The Anglo-Australian miner sees £2.56 billion of net profit in the first half.
  • The world's second largest miner ends June with £3.72 billion of net debt.

Rio Tinto Group (LON: RIO) said that its net profit in the first half (H1) of the current fiscal year came in 20% lower but still raised its dividend payout (mid-year) on Wednesday. The company signalled uneven global recovery last week.

Shares of the company are currently more than 1% up on Wednesday. At £48.28 per share, Rio Tinto is roughly 6% up year to date in the stock market after recovering from a low of £29.68 per share in March. Learn more about capital markets.

Rio Tinto sees £2.56 billion of net profit in H1

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

At £2.56 billion, the world’s 2nd largest metals and mining corporation said that its net profit in H1 came in significantly lower than £3.18 billion in the same period last year. Rio attributed the decline to exchange-rate losses, higher impairment charges, and costs associated with the closure of a few of its assets.

In terms of earnings, the company recorded £3.66 billion in the first half that topped the analysts’ estimates but were about 4% lower on an annualised basis. Rio’s board declared £1.20 per share of interim dividend on Wednesday. According to CEO Jean-Sebastien Jacques:

“Despite the challenging backdrop, we generated underlying earnings before interest, tax, depreciation and amortisation of $9.6 billion, with a margin of 47%, driven by our strong and stable operations, with all of our assets continuing to operate throughout the first half.”

Iron-ore production in Australia did not see a significant hit from the ongoing Coronavirus pandemic. Consequently, Rio Tinto benefitted as shipments of the commodity remained high in recent months. In the second quarter, it reported a 1.5% increase in iron-ore shipments.

Rio Tinto ends June with £3.72 billion of net debt

For the full year, Rio forecasts 324 million to 334 million tons of iron-ore shipments. For copper supply, however, the company estimates a 3% to a 4% disruption due to the health crisis so far and warned that it could get worse in the upcoming months.

The London-headquartered company also boasted to have concluded the month of June with £3.72 billion of net debt that shrank sharply from £9.95 billion in 2016. In other news, Lancashire also revealed to have swung to a loss on Wednesday.

Rio Tinto performed fairly upbeat in the stock market last year with an annual gain of roughly 25%. 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.