Rio Tinto sees profits slide, but eyes US$2.5bln dividend

Rio Tinto Raises Dividend on Strength in Iron Ore

Rio Tinto Share Price Edges Higher as Earnings Top Estimates

Pretax profit was up 1.7% at USD5.28 billion compared to last year's first half of USD5.19 billion.

Despite the marginal drop in revenue, Rio Tinto announced an interim dividend of 155 USA cents per share, costing USD2.5 billion, and up 2.6% from last year's interim dividend of 151 USA cents per share.

The shelter is now operating with finances in place for 25 individuals, but the additional funding will allow for the housing of five more residents, CBC News reports.

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. Rio attributed the decline to exchange-rate losses, higher impairment charges, and costs associated with the closure of a few of its assets.

The company unveiled a half-year net profit of $US3.32 billion ($4.6 billion) shortly after the ASX closed, down 20 per cent on the same period previous year, although its underlying earnings - excluding a range of one-off costs - were down just 4 per cent to $US4.75 billion ($6.59 billion).

"Despite the challenging backdrop, we generated underlying earnings before interest, tax, depreciation and amortization 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", Mr. Jacques said.

Rio's London-listed shares were up 1.5% by 1040 GMT, outpacing a 0.6% rise in the wider market .FTNMX1770 .

Iron ore accounted for more than 90% of earnings, underscoring the extent to which Rio is reliant on the steel-making ingredient and also on the pace of economic recovery in China, the top consumer. BHP's iron-ore output rose by 11% in its most recent quarter.

The funding, Rio Tinto says, will provide accommodation and food for individuals who are at high medical risk of serious illness or death if they contract novel coronavirus.

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

A separate Simandou venture about 70 kilometers (44 miles) to the north, could be up and running within five years, producing about 60 million tons a year in an initial stage, according to Societe Miniere de Boke, part of a consortium with Singapore's Winning Shipping Ltd. and Guinea's government.

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