Shares of British-Australian miner Rio Tinto Limited (AU:RIO) gained 2.5% as of writing after the company reported a 14% year-over-year growth in its first-half profits. The company recorded profit after tax attributable to owners of $5.81 billion, up from $5.12 billion a year ago. Meanwhile, the consolidated sales revenue grew by 1% to $26.8 billion.
Rio Tinto holds a diverse portfolio of commodities with operations in 35 countries worldwide.
More on Rio Tinto’s H1 Results
In the first half, Rio Tinto’s underlying EBITDA (earnings before interest, tax, depreciation, and amortization) increased by 3% to $12.1 billion.
Among its commodities, copper’s underlying EBITDA rose 67% to $1.8 billion, while aluminium EBITDA grew by 38% to $1.6 billion. However, due to weaker prices, iron ore EBITDA declined by 10% to $8.8 billion.
During the first half, Rio Tinto witnessed a 6% jump in its average realized copper prices. The price for this metal has surged, driven by huge demand in electric vehicles and energy transition. Looking ahead, the company is set to increase its copper equivalent production by about 2% this year. Also, it aims to achieve approximately 3% compound annual growth rate (CAGR) through its existing operations between 2024 and 2028.
Additionally, Rio Tinto announced an interim dividend of 1.77 per share, maintaining its 50% payout policy. This equates to a payment of $2.9 billion, similar to the previous year.
Rio Tinto to Retain Dual Listing
Furthermore, Rio Tinto’s CEO, Jakob Stausholm, clarified that the company will not abandon its dual listing in London and Sydney, as this would reduce shareholder value. In May 2024, UK-based activist hedge fund Palliser Capital urged Rio Tinto to discontinue its primary listing in London, arguing that this would address the undervaluation resulting from the dual listing.
Are Rio Tinto Shares a Good Buy?
According to TipRanks, RIO stock has received a Moderate Buy rating based on 11 recommendations, of which seven are Buy. The RIO share price forecast is AU$140.21, which is 19.8% above the current trading level.
