Rio Tinto posts smallest first-half profit in five years

[LONDON] Rio Tinto reported its smallest first-half underlying profit in five years on Wednesday (Jul 30), as iron ore prices remained subdued due to oversupply concerns and soft China demand, offsetting higher earnings from its copper business.

Iron ore prices eased in the first half of the year as steel production in top consumer China declined and more supply from Australia, Brazil, and South Africa came to the global market, denting Rio Tinto’s earnings from the steel-making raw material.

Expectations that China will curb overcapacity in the steel sector and restocking before 2025-end could underpin a pickup in prices to US$100 per metric ton towards the year-end, according to a note by Morgan Stanley.

Rio Tinto, the world’s largest iron ore producer, reported underlying earnings of US$4.81 billion for the six months ended June 30, missing a Visible Alpha consensus of US$5.05 billion. This was the company’s weakest first-half performance since 2020.

Last year, it reported underlying earnings of US$5.75 billion.

Rio Tinto, which is increasingly shifting its focus to copper, declared an interim dividend of US$1.48 per share for the first half of the year, lower than the US$1.77 apiece it gave out last year. REUTERS