Rio Tinto H1 profits slump 29% from record high

Rio Tinto reported an underlying profit of $8.63bn for the six months ended 30 June, down from an all-time high of $12.17bn at the same time a year earlier but just ahead of guidance for $8.37bn.

While the FTSE 100-listed group slashed its interim dividend from $5.61 to $2.67 per share, this still equated to $4.3bn - Rio's second-highest interim payout ever. Rio also cut capital investment forecasts for 2022 by $500.0m to $7.5bn.

Chief executive Jakob Stausholm said: "We remain focused on delivering on our long-term strategy, with a steady improvement in operating performance and some notable advances in our growth agenda. We continue to strengthen our partnership with the Mongolian government following commencement of underground mining at Oyu Tolgoi, delivered first iron ore from the Gudai-Darri mine, and approved early works funding at the Rincon lithium project.

"Market conditions were good, albeit below last year's record levels. We delivered largely flat production and solid financial results, with underlying EBITDA of $15.6bn, free cash flow of $7.1bn, and underlying earnings of $8.6bn, after taxes and government royalties of $4.8bn. As a result, we are paying our second highest ever interim dividend of $4.3bn, a 50% payout, in line with our policy."

Stausholm also warned that the market environment had become "more challenging" at the end of the period, stating its operations and growth projects were impacted by high levels of unplanned absences, a tight labour market, rising input costs, and supply chain disruptions, while China's plan to centralise iron ore purchases also added to concerns around future prospects for the miner.

Reporting by Iain Gilbert at Sharecast.com