Rio Tinto Chief Executive J-S Jacques said “We have been agile and adapted our way of working, to deliver another resilient performance while navigating the new and ongoing challenges of dealing with COVID-19. Despite the challenging backdrop, we generated underlying EBITDA 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. As a result, we have declared an interim dividend of $2.5 billion, equivalent to 155 US cents per share, and have reconfirmed our 2020 production guidance across all commodities.

“Our world-class portfolio of high-quality assets and our strong balance sheet consistently serve us well in all market conditions and particularly in turbulent times. This, together with our disciplined capital allocation, underpins our ability to sustain production, increase our investment in the business, pay taxes and royalties to governments and continue delivering superior returns to shareholders.”

• Sustained improvement in safety performance, with the all injury frequency rate declining to 0.37 (0.42 in 2019), a reduction in the severity rate and fewer process safety incidents.
• We remain committed to our relationship with communities, following the Juukan Gorge events in the Pilbara. We are engaging extensively with Traditional Owners, including the Puutu Kunti Kurrama and Pinikura people, and indigenous leaders in the Pilbara and across Australia. A board-led review of our heritage management processes is underway. We will make our submission to the Inquiry by the Joint Standing Committee on Northern Australia by 31 July.
• $5.6 billion operating cash flow was 12% lower than 2019 first half, mainly due to lower prices and the effect of timing differences. In June 2020 we made a final payment of $1.0 billion in Australian income tax with respect to 2019 profits.
• $2.8 billion free cash flow² was 28% lower than 2019 first half, reflecting the lower operating cash flow and a 13% rise in capital expenditure to $2.7 billion due to an increase in development capital.
• $9.6 billion underlying EBITDA² was 6% lower than 2019 first half, primarily due to lower prices for aluminium and copper. Iron ore prices were stable, reflected in our underlying EBITDA margin² of 47%.
• $4.8 billion underlying earnings² was 4% lower than 2019 first half. Taking exclusions into account, net earnings of $3.3 billion mainly reflected $1.0 billion³ of impairments, of four aluminium smelters and the Diavik diamond mine, and exchange rate movements.
• Maintained strength in our balance sheet with $4.8 billion of net debt², an increase of $1.2 billion, which mainly reflects $3.8 billion of cash returns paid to shareholders in 2020 first half, partly offset by the free cash flow of $2.8 billion.
• $2.5 billion interim ordinary dividend declared today, with interim pay-out ratio at 53% of first half underlying earnings, equivalent to 155 US cents per share, 3% higher than 2019 first half.

The financial results are prepared in accordance with IFRS and are unaudited.

The full Rio Tinto 2020 interim results announcement is available here

Source: Rio Tinto