The Rio Tinto Ltd (ASX: RIO) share price is under the microscope after the ASX mining share announced its FY24 first-half result.
Rio Tinto mines various commodities, including iron ore, copper, aluminium, bauxite, and more.
HY24 result
Here are the highlights from the Rio Tinto report for the first six months of 2024:
- Revenue up 1% to US$26.8 billion
- Underlying EBITDA increased 3% to US$12 billion
- Net profit after tax (NPAT) up 14% to US$5.8 billion
- Operating cashflow up 1% to US$7.06 billion
- Free cashflow down 25% to US$2.84 billion
- Underlying profit / earnings per share (EPS) up slightly to US$3.543
- Interim dividend per share flat at US$1.77
Rio Tinto said it’s consistently very profitable and growing, which is being driven by the disciplined investments it’s making to strengthen its operations and progress major projects for profitable organic growth.
Its copper production is on track to grow “around 2%” this year, with an ambition to deliver compound annual growth of 3% between 2024 to 2028 from existing operations.
Management said the “strong” balance sheet allows the business to continue with its 50% dividend payout ratio, to pay a US$2.9 billion dividend.
Leadership comments
The Rio Tinto CEO Jakob Stausholm said:
We are at an inflection point in our growth, with a step change from our aluminium business and consistent production at our Pilbara iron ore operations. We have considerable growth in cash flow from the ramp-up of the underground copper mine at Oyu Tolgoi, and more value to come as our Simandou investment and Rincon lithium project proceed at pace.
We are also solving some of our most complex challenges through technology and partnerships, such as the renewable power solutions announced for Boyne and NZAS.
Our strengthened operations along with stable pricing for our commodities have allowed us to again deliver robust financial results, with underlying EBITDA of $12.1 billion.
Final thoughts on the Rio Tinto share price
Before today’s share price movement, the ASX mining share had dropped 16% since 22 May 2024, which is a sizeable decline for such a large business.
I wouldn’t call it a bargain, I’d prefer to invest when the share price was much closer to $100, or even below.
The company’s plan with the huge African iron ore mine Simandou, and its copper plans, are promising, they could unlock strong future cashflow. The dividend continues to be appealing as well, while still investing for the future.
It’s one of the ASX dividend shares I’d be interested in at the right price, but I don’t think it’s at a market-beating valuation yet.