Rio Tinto Group (RIO) H1 2024 earnings summary

Executive summary

• Underlying EBITDA reached $12.1 billion, up 3% year-on-year, with net earnings of $5.8 billion, a 14% increase, and underlying earnings up 1% year-on-year.

• Declared interim dividends of $2.9 billion, maintaining a 50% payout ratio, and a strong balance sheet with net debt of $5.1 billion.

• Growth driven by disciplined investment in major projects, operational improvements, and strategic M&A, with key ramp-ups at Oyu Tolgoi, Simandou, and Rincon.

• Significant progress in decarbonization, renewable energy procurement, and social license initiatives, including new long-term renewable power agreements.

• Safety remains a top priority, though the period was marked by a tragic plane crash at Diavik diamond mine.

Financial highlights

• Consolidated sales revenue rose 1% to $26.8 billion, with underlying EBITDA up 3% to $12.1 billion and net earnings up 14% to $5.8 billion.

• Free cash flow was $2.8 billion, reflecting higher capital expenditure of $4 billion and working capital outflows.

• Net debt increased to $5.1 billion, with a net gearing ratio of 8%.

• Return on capital employed was 19%, slightly down from 20% last year.

• Underlying earnings per share were 354.3 US cents, flat year-over-year.

Outlook and guidance

• Capital investment guidance up to $10 billion per year through 2026, with up to $3 billion in growth projects annually.

• 2024 production guidance: Pilbara iron ore shipments 323–338 Mt, bauxite 53–56 Mt, mined copper 660–720 kt, aluminium 3.2–3.4 Mt.

• Pilbara iron ore unit cash costs expected at $21.75–$23.50 per wet metric tonne; copper C1 unit costs at 140–160 US cents/lb.

• Simandou first ore expected in 2025, Oyu Tolgoi to deliver 500,000 tonnes of copper annually from 2028.

• Decarbonization targets on track to halve emissions by 2030, with ongoing investments in renewable energy and innovation.