Analyst Note| Mathew Hodge, CFA |
No-moat Rio Tinto’s first-half 2021 profit was very strong but slightly softer than our lofty expectations. Adjusted net profit aftertax nearly tripled to USD 12.2 billion, or USD 7.47 per share, compared with USD 4.5 billion the June 2020 half. Adjusted EBITDA more than doubled to USD 21 billion. Of the USD 11.4 billion uplift in EBITDA versus the prior half, USD 12.8 billion was from higher prices while softer volumes, higher unit costs and foreign exchange were modest offsetting headwinds. Of the price benefit, about 75% or USD 9.9 billion was from the higher average iron ore price, while copper and aluminium contributed just over USD 1 billion each.