The Rio Tinto Ltd (ASX: RIO) share price is under the spotlight after the ASX mining share announced its FY23 half-year result.
Rio Tinto FY23 half-year result
Here are some of the highlights for the first six months of 2023, compared to the first six months of 2022:
- Revenue fell by 10% to US$26.7 billion
- Underlying EBITDA (EBITDA explained) declined by 25% to US$11.7 billion
- Statutory net profit after tax (NPAT) sank by 43% to US$5.1 billion
- Operating cashflow dropped 33% to US$7 billion
- Underlying profit / earnings per share (EPS) declined 34% to US$3.53
- Ordinary dividend per share was cut by 34% to US$1.77
While lower revenue explained part of the decline in the profit, it also suffered from a $0.8 billion (after tax) impairment charge mainly relating to its Australian alumina refineries in Queensland. Rio Tinto said this was triggered by “challenging market conditions facing these assets” as well as an “improved understanding of the capital requirements for decarbonisation and the recently legislated cost escalation for carbon emissions.”
Portfolio progress
Rio Tinto boasted that its Pilbara iron ore business has consistently improved its performance, with five consecutive quarters of year on year growth.
It’s also making progress when it comes to its other operations. For example, there’s the first “sustainable production” from the Oyu Tolgoi underground copper mine in Mongolia.
The company recently announced the agreement to form the Matalco aluminium joint venture to enter the “exciting and fast growing aluminium recycling industry in North America.”
Finally, the large Simandou iron ore project in Guinea is “advancing at pace, with final approvals expected later this year.”
Management commentary
The Rio Tinto CEO Jakob Stausholm said:
Our disciplined investment in lifting the health of our assets and focus on culture, mindset and relationships is delivering results.
We will continue paying attractive dividends and investing in the long-term strength of our business as we sustain and grow our portfolio, while contributing to society’s drive to net zero.
Final thoughts on the Rio Tinto share price
Rio Tinto seems to be one of the best miners in the world. I think its push to diversify away from iron ore, into things like aluminium recycling, copper and lithium is a smart move. Its decision to expand into African iron ore could turn out to be a clever choice as well.
It has a promising future, but it could be better to wait for a cheaper Rio Tinto share price to invest if/when the iron ore price goes lower. I’m hoping to make capital gains with all of my ASX share investing, as well as the dividend income.
