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Rio Tinto PLC RIO

Rating as of

Morningstar’s Analysis

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Currency in GBX
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Rio Tinto’s Bumper First Half a Function of Near-Record Commodity Prices

Mathew Hodge, CFA Regional Director

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.

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Company Profile

Business Description

Rio Tinto searches for and extracts a variety of minerals worldwide, with the heaviest concentrations in North America and Australia. Iron ore is the dominant commodity, with significantly lesser contributions from aluminium, copper, diamonds, gold, and industrial minerals. The 1995 merger of RTZ and CRA, via a dual-listed structure, created the present-day company. The two operate as a single business entity. Shareholders in each company have equivalent economic and voting rights.

Contact
6 St James’s Square
London, SW1Y 4AD, United Kingdom
T +44 2077812000
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 47,500