Rio Tinto: Iron ore carries the group but still a near miss

About the author:

Adrian Prendergast
Author name:
By Adrian Prendergast
Job title:
Senior Analyst
Date posted:
27 July 2023, 7:00 AM
Sectors Covered:
Mining, Energy

  • A somewhat fragmented 1H23 result, with a surprisingly strong performance from Rio Tinto's (ASX:RIO) iron ore business, versus the rest of the business which trailed estimates.
  • RIO’s group underlying EBITDA of US$11.7bn trailed consensus of US$12.0bn.
  • Volatile metal prices continue to impact FCF, with only iron ore meaningfully FCF positive in 1H’CY23.
  • Interim dividend of US177cents vs consensus US180cents / MorgE US176cents.
  • RIO outlined that it no longer believed it could achieve FY25 emissions reduction targets.
  • It has been difficult finding an opportunity to upgrade our investment view on RIO, given the consistency of its investor support. Hold rating maintained.

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