Rio Tinto has reported a solid first-half performance, driven by increased output across its iron ore, aluminium, and copper divisions. According to RBC Capital Markets analysts Kaan Peker and Ben Davis, this stronger output resulted in a 6 per cent beat at the product group level. Rio Tinto is a leading global mining group that focuses on finding, mining, and processing the Earth’s mineral resources. The company supplies a range of materials essential to modern life.
Underlying EBITDA reached $11.5 billion, surpassing RBC estimates by 2 per cent. However, this positive result was partially offset by $300 million in restructuring costs associated with the Arcadium deal. Despite the strong operational performance, earnings per share fell short by 4 per cent, and the dividend was 5 per cent below consensus expectations. These misses were attributed to higher finance costs and an unexpected tax impact.
Rio Tinto has increased its 2025 effective tax rate guidance from 30 per cent to 33 per cent, citing a shift in the earnings mix. Capital expenditure was 15 per cent lower than anticipated, contributing to a free cash flow of $2.2 billion. This also reduced net debt to $14.5 billion. While copper unit costs were reduced, the full-year production guidance remained unchanged.
Following the report, shares in Rio Tinto experienced a decline, trading down 1.9 per cent at 11.10am AEST. The overall solid operational results were tempered by restructuring costs and increased tax implications, influencing investor sentiment.
