Rio Tinto sees profits slide, but eyes US$2.5bln dividend
- by Johnnie Parks
- in Money
- — Jul 31, 2020
Rio Tinto reported a USD5.6 billion in operating cash flow, down 12% from the prior year's USD6.4 billion, and USD2.8 billion in free cash flow, which was 28% lower than last year's USD3.88 billion.
The company on Wednesday reported underlying earnings of $4.75bn for the six months to June 30, beating market expectations of $4.36bn.
"Our industry has been hit by supply and demand shocks on a scale that has never been seen before", Chief Executive Jean-Sébastien Jacques said.
As a result of strong earnings, Rio Tinto was able to declare an interim dividend of $1.55 per share, slightly higher than $1.51 per share paid previous year.
More news: New documents show Jeffrey Epstein contacts with Ghislaine MaxwellThe global economy suffered a severe contraction in the three months through June, as the US grappled with rising coronavirus cases and other countries faced second waves of infections that are proving harder to contain than initial outbreaks.
Over the next 24 hours, Apple, Amazon Alphabet and Facebook will report their earnings (these companies make up roughly one fifth of the S&P 500), tipping to have an impact on global markets.
"Big questions remain over the trajectory of consumer spending globally in the face of significant levels of unemployment", Jacques said.
Rio Tinto Limited will pay Australian shareholders $A2.1647 per share, down from $2.1908 a year ago. In contrast, Australia's iron-ore production is in a region largely unaffected by virus cases, enabling mining companies including Rio Tinto and BHP Group Ltd.to continue shipping the commodity at high rates.
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"We are having a lot of private conversations for all our smelters in Aus. Those are challenging conversations, there is no doubt about it, and we are working hard in order to find a solution", Jacques said.
" A board-led review of our heritage management processes is underway", he said.
Rio expects Guinea's giant Simandou iron ore reserve to be developed, as China looks to diversify its sourcing away from the Australians and Vale in Brazil.
More news: Judge bans lawyers from identifying Epstein abuse victimsGuinea in June signed an agreement with a consortium for the development of the giant reserve after it won a $14 billion tender last November to develop the blocks which hold more than 2 billion tonnes of high-grade ore.
