Rio Tinto Dividends - RIO

Rio Tinto Dividends - RIO

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Rio Tinto Plc RIO London Ordinary Share GB0007188757 ORD 10P
  Price Change Price Change % Stock Price High Price Low Price Open Price Close Price Last Trade
  -65.50 -1.63% 3,953.50 3,984.50 3,921.00 3,945.50 4,019.00 15:44:25
more quote information »
Industry Sector
MINING

Rio Tinto RIO Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount
27/02/2019SpecialUSX24331/12/201731/12/201807/03/201908/03/201918/04/20190
27/02/2019FinalUSX18031/12/201731/12/201807/03/201908/03/201918/04/2019307
01/08/2018InterimUSX12731/12/201731/12/201809/08/201810/08/201820/09/20180
07/02/2018FinalUSX18031/12/201631/12/201701/03/201802/03/201812/04/2018290
02/08/2017InterimUSX11031/12/201631/12/201710/08/201711/08/201721/09/20170
08/02/2017FinalUSX12531/12/201531/12/201623/02/201724/02/201706/04/2017170
03/08/2016InterimUSX4531/12/201531/12/201611/08/201612/08/201622/09/20160
11/02/2016FinalUSX107.531/12/201431/12/201525/02/201626/02/201607/04/2016215
06/08/2015InterimUSX107.531/12/201431/12/201513/08/201514/08/201510/09/20150
12/02/2015FinalUSX11931/12/201331/12/201405/03/201506/03/201509/04/2015215
07/08/2014InterimUSX9631/12/201331/12/201413/08/201415/08/201411/09/20140
13/02/2014FinalUSX108.531/12/201231/12/201305/03/201407/03/201410/04/2014192
08/08/2013InterimUSX83.531/12/201231/12/201314/08/201316/08/201312/09/20130
09/02/2013FinalUSX94.531/12/201131/12/201206/03/201308/03/201311/04/2013167
08/08/2012InterimUSX72.531/12/201131/12/201215/08/201217/08/201213/09/20120
09/02/2012FinalUSX9131/12/201031/12/201102/03/201206/03/201212/04/2012145
04/08/2011InterimUSX5431/12/201031/12/201110/08/201112/08/201108/09/20110
10/02/2011FinalUSX6331/12/200931/12/201002/03/201104/03/201131/03/2011108
05/08/2010InterimUSX4531/12/200931/12/201011/08/201013/08/201009/09/20100
15/03/2010FinalUSX4531/12/200831/12/200924/02/201026/02/201001/04/201045
16/03/2009FinalUSX6831/12/200731/12/200818/02/200920/02/200908/04/2009130
26/08/2008InterimUSX6830/12/200730/06/200803/09/200805/09/200802/10/20080
10/03/2008FinalUSX43.1331/12/200631/12/200720/02/200822/02/200811/04/200868.72
01/02/2007FinalUSX32.6331/12/200531/12/200607/03/200709/03/200713/04/200754.05
02/08/2006InterimUSX21.4230/12/200530/06/200609/08/200611/08/200607/09/20060
01/02/2006FinalUSX23.3531/12/200431/12/200522/02/200624/02/200606/04/200645.1
05/08/2005InterimUSX21.7530/12/200430/06/200510/08/200512/08/200501/01/19700
05/02/2005FinalUSX23.9431/12/200331/12/200423/02/200525/02/200508/04/200541.48
29/07/2004InterimUSX17.5430/12/200330/06/200411/08/200413/08/200410/09/20040
30/01/2004FinalUSX18.6831/12/200231/12/200310/03/200412/03/200406/04/200437.13
31/07/2003InterimUSX18.4530/12/200230/06/200313/08/200315/08/200312/09/20030
30/01/2003FinalUSX18.631/12/200131/12/200205/03/200307/03/200307/04/200337.47
25/07/2002InterimUSX18.8730/12/200130/06/200214/08/200216/08/200213/09/20020
31/01/2002FinalUSX27.6531/12/200031/12/200106/03/200208/03/200208/04/200241.68
02/08/2001InterimUSX14.0330/12/200030/06/200115/08/200117/08/200114/09/20010
05/02/2001FinalUSX26.231/12/199931/12/200007/03/200109/03/200106/04/200138.9
03/08/2000InterimUSX12.730/12/199930/06/200014/08/200018/08/200015/09/20000
24/02/2000FinalUSX23.831/12/199831/12/199906/03/200010/03/200007/04/200034.2
29/07/1999InterimUSX10.430/12/199830/06/199909/08/199913/08/199931/08/19990
08/03/1999FinalUSX22.0431/12/199731/12/199811/03/199915/03/199908/04/199932
10/09/1998InterimUSX9.9630/12/199730/06/199821/09/199825/09/199819/10/19980

Top Dividend Posts

DateSubject
05/10/2019
09:05
the grumpy old men: MOTELY FOOL Are Fortescue, Rio Tinto and BHP shares a buy for their dividends? Lina Lim | October 3, 2019 1:23pm | More on: BHP FMG RIO ASX iron ore miners ASX 200 iron ore miners BHP Group Ltd (ASX: BHP), Fortescue Mining Group Ltd (ASX: FMG) and Rio Tinto Limited (ASX: RIO) have all staged significant share price recoveries after iron ore supply woes throughout August. But are they a buy for their dividends, on current prices? What’s the outlook for iron ore? The iron ore spot price currently sits at around US$90 per tonne, while Chinese iron ore futures soared by more than 2% on Wednesday. I believe the market has largely internalised the news that the world’s largest iron ore miner, Vale SA, is returning to form after its tailings dam disaster earlier this year. The Brazilian miner maintained its 2019 iron ore and pellet sale guidance of 207–322 million tons, with sales expected to be around the mid-point of that range. With that in mind, the Australian government sees iron ore prices in 2019 averaging around $80 per tonne FOB, reflecting the full effect of supply disruptions and firm demand from China. However, it also expects the price to gradually decline to average $57 by 2021, as the seaborne market gradually returns to balance. In terms of global economies, China has maintained a steady level of steel production with its central bank announcing that it will continue to implement a prudent monetary policy and increase the strength of counter-cyclical measures. This should buoy the iron ore spot price and steel production levels. On the flip side, US manufacturing purchasing managers’ index (PMI) signalled that manufacturing business activity was contracting at a stronger pace than expected. This reflects lower consumer demand and a contraction in new export orders. In the short term, the iron ore spot price could maintain the US$80–90 mark as the Australian dollar continues to pivot lower on the back of lower interest rates. This could expose investors to both capital upside and strong dividends. In terms of dividend yield, Fortescue pays a whopping 14% gross yield thanks to its 195% increase in underlying net profit and 266% increase in earnings per share in FY19. This represents a 78% dividend payout ratio – a delicate position where there isn’t too much space to increase dividends, while a lower iron price could potentially lower dividends in the future. BHP and Rio Tinto, on the other hand, pay a 7.8% and 8.7% gross yield, respectively. Foolish takeaway Current market conditions are volatile as lower interest rates drive capital inflows into equity markets, while global economic is showing signs of sluggish growth. A short-term opportunity may exist for investors as iron ore prices remain steady and miners continue to reap the benefits of a higher spot price and increased steel production from China. However, investors should be wary of the medium–long term outlook and the implications that may have on dividends.
07/8/2019
12:27
the grumpy old men: THE MOTELY FOOL Can the Glencore share price ever return to 400p? Roland Head | Wednesday, 7th August, 2019 | More on: GLEN Diggers and trucks in a coal mine Image source: Getty Images. The Glencore (LSE: GLEN) share price has fallen by nearly 30% over the last year, during a period when big miners such as Rio Tinto and Anglo American have seen gains. GLEN’s record highs of more than 400p at the start of 2018 now seem like a distant memory. Shareholders may be wondering what’s gone wrong at this mining and trading group. I’ve been taking a look at today’s half-year results to find out more. In this article, I’ll explain why I’m beginning to see some value in this FTSE 100 stock. Grim headlines The headline figures from Glencore’s half-year profits weren’t great. The group’s adjusted operating profit fell by 56% to $2,229m during the first half of the year. Funds from operations, a measure of cash generation, fell by 37% to $3,516m. This news wasn’t a complete surprise. The market was already braced for a weaker performance from the firm, which has been hit by the falling price of cobalt and by problems at its African copper mines. Spot the difference With big miners such as Rio Tinto reporting bumper profits, it’s tempting to think that commodity prices must be rising. In fact, Rio’s record half-year profits last week were driven by just one factor — iron ore. The red stuff hit a high of over $120 per tonne during the first half, lifting Rio’s iron ore profits by 39% to $4.5bn. This surge in profit disguised big falls in Rio’s half-year earnings from other commodities. For example, aluminium was down 64%, profits from copper and diamonds were 23% lower. Coal was down 27%. The problem for Glencore is that although its trading business handles iron ore, it doesn’t own any iron ore mines. So the group has not benefited directly from recent high prices. This is one of the main reasons why today’s figures look so poor when compared to iron ore-mining rivals. Troubles? GLEN’s got ’em Admittedly, Glencore has some other problems too. The company is currently facing a number of US legal investigations into alleged corruption. Production at the Mutanda cobalt mine in the Democratic Republic of Congo will now be mothballed for two years. During this time, the firm hopes prices will rise, allowing it to clear a backlog of 10,000 tonnes of unsold production. Today’s results include a $350m write-down on the value this inventory. Finally, the group’s African copper mines have also been underperforming and recorded a loss of $315m during the first half of the year. Chief executive Ivan Glasenberg said today that a programme of changes is under way to address this, but this is unlikely to be a quick fix. Still a cash machine Despite these problems, today’s accounts suggest that Glencore’s cash generation remains strong. My sums show that the group generated free cash flow of about $7.7bn over the last 12 months, compared with $7.2bn in 2018, excluding acquisitions. On this measure, Glencore shares are valued at around five times free cash flow. I see this as extremely cheap. This level of free cash flow also provides strong backing for this year’s dividend of $0.20 per share, which supports a yield of 7.3%. It isn’t without risk. But in my view, the shares are starting to look tempting. A return to 400p could take some time, but I think the stock could be worth buying at current levels.
30/7/2019
06:51
waldron: MOTELYFOOL Iron ore miners tumble: Are Fortescue, BHP and Rio Tinto a buy? Lina Lim | July 29, 2019 | More on: BHP FMG RIO Dominoes falling in a row The iron ore spot price has stabilised around the US$120 per tonne mark while the S&P/ASX 200 (INDEXASX: XJO) index has just passed 6,800. This is in stark contrast to the ASX iron ore miners, which have struggled on the news that the world’s largest miner, Vale SA, would resume production at its Vargem Grade complex. This news has resulted in the following price movements in the past week: BHP Group Ltd (ASX: BHP) share price down 1.07% to $40.56 (at time of writing) Fortescue Metals Group Ltd (ASX: FMG) share price down 4.6% to $8.30 (at time of writing) Rio Tinto Limited (ASX: RIO) share price down 4% to $98.26 (at time of writing) Is this a buy opportunity? The iron ore bull run is perhaps at its cross roads as Vale SA slowly returns to form. The Brazilian miner said that the move to Vargem Grade will add approximately 5 million tonnes to annual production. We’ve known for a long time that Vale has been awaiting supreme court approval for the resumption of production at several mine sites. Last month, Vale SA received court approval to enable the full resumption of wet processing operations at its Brucutu mine. Brucutu has an annual production capacity of approximately 30 metric tonnes per annum (Mtpa) of iron ore. This represents 8% of Value’s annual output. Fast forward to today, and the Vargem decision will enable the partial resumption of dry processing operations, which will total approximately 5 Mt of additional production in 2019. If we piece together the initial statistics of the Vale disaster that resulted in a loss of approximately 90 million tonnes of an annualised supply of around 1.7 billion tonnes, it appears as though the market is very slowly coming back to equilibrium. The plateauing bullish fundamentals overshadow Fortescue’s June 2019 quarterly production report, which highlight a 22% rise in total ore shipped while citing sustained strong demand from customers. Foolish takeaway I believe the recent falls in BHP, Rio Tinto and Fortescue share price are, to some degree, a market overreaction. However, I am going to make the bold call that the top is in for ASX iron ore miners. On one hand, demand side fundamentals remain robust and the supply–demand imbalance will continue to persist in the short term. But it is evident that the market is slowly creeping back to an equilibrium and I find it highly unlikely that ASX iron ore miners will break out their old highs.
03/7/2019
12:23
maywillow: Macquarie tips Rio Tinto share price to hit $114 Motley Fool Staff | July 3, 2019 | More on: RIO Financial news wires are reporting that the expert mining analysts at Macquarie Group Ltd (ASX: MQG) expect the Rio Tinto Limited (ASX: RIO) share price could hit $114 in 2019. Rio Tinto shares are already up around 34% over just the past year to $107.14 today largely on the back of the unexpected rise of the iron ore price from US$67 per tonne at the start of 2019 to US$121 per tonne today according to data provider Market Index. The iron ore price rise is largely due to supply constraints out of Brazil after a tragic mining accident killed more than 300 people in the world’s second largest producer of iron ore behind Australia. Rio Tinto has also benefited from the falling Australian dollar as most of the WA miner’s operating costs are incurred in Australian dollars before it sell its product in US dollars. This provides a big uplift to margins and profits meaning the miner can pay out bigger dividends. On June 19 2019 Rio was forced to revise down 2019 production to between 320 million to 330 million tonnes of iron ore in a result it blamed on “operational challenges” and a higher proportion of low grade product that originally expected.
09/6/2019
12:10
la forge: A Deeper Look into the Quant Scorecard For: Rio Tinto Group (LSE:RIO), UBS Group AG (SWX:UBSG) Written by John Wilkes × June 9, 2019 There are many different tools to determine whether a company is profitable or not. One of the most popular ratios is the “Return on Assets” (aka ROA). This score indicates how profitable a company is relative to its total assets. The Return on Assets for Rio Tinto Group (LSE:RIO) is 0.142469. This number is calculated by dividing net income after tax by the company’s total assets. A company that manages their assets well will have a higher return, while a company that manages their assets poorly will have a lower return. Creating a diversified stock portfolio is one way that investors may combat the unknown. Appropriate levels of risk that include different market scenarios might vary from one individual investor to the next. Investors may need to careful that they do not become too reliant on one big position. When that position is producing returns, it can be easy to assume that the holding will continue to produce positive results. If the portfolio is weighted too heavily on one or two big positions, an overall market downturn may send the investor reeling. Finding that proper portfolio balance is typically what dedicated investors strive for. Taking a step further we can take a look at various other valuation metrics. Rio Tinto Group (LSE:RIO) has a Price to Book ratio of 2.146671. This ratio is calculated by dividing the current share price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some other ratios, the company has a Price to Cash Flow ratio of 7.933295, and a current Price to Earnings ratio of 6.876337. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued. The Free Cash Flor Yield 5yr Average is calculated by taking the five year average free cash flow of a company, and dividing it by the current enterprise value. Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The average FCF of a company is determined by looking at the cash generated by operations of the company. The Free Cash Flow Yield 5 Year Average of Rio Tinto Group (LSE:RIO) is 0.049266. The Return on Invested Capital (aka ROIC) for Rio Tinto Group (LSE:RIO) is 0.163431. The Return on Invested Capital is a ratio that determines whether a company is profitable or not. It tells investors how well a company is turning their capital into profits. The ROIC is calculated by dividing the net operating profit (or EBIT) by the employed capital. The employed capital is calculated by subrating current liabilities from total assets. Similarly, the Return on Invested Capital Quality ratio is a tool in evaluating the quality of a company’s ROIC over the course of five years. The ROIC Quality of Rio Tinto Group (LSE:RIO) is 3.920713. This is calculated by dividing the five year average ROIC by the Standard Deviation of the 5 year ROIC. The ROIC 5 year average is calculated using the five year average EBIT, five year average (net working capital and net fixed assets). The ROIC 5 year average of Rio Tinto Group (LSE:RIO) is 0.117215. Rio Tinto Group (LSE:RIO) presently has a current ratio of 1.92. The current ratio, also known as the working capital ratio, is a liquidity ratio that displays the proportion of current assets of a business relative to the current liabilities. The ratio is simply calculated by dividing current liabilities by current assets. The ratio may be used to provide an idea of the ability of a certain company to pay back its liabilities with assets. Typically, the higher the current ratio the better, as the company may be more capable of paying back its obligations. In terms of value, Rio Tinto Group (LSE:RIO) has a Value Composite score of 24. Developed by James O’Shaughnessy, the VC score uses five valuation ratios. These ratios are price to earnings, price to cash flow, EBITDA to EV, price to book value, and price to sales. The VC is displayed as a number between 1 and 100. In general, a company with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued company. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 16. Quant Ranks (ERP5, Gross Margin, F Score) The ERP5 Rank is an investment tool that analysts use to discover undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC. The ERP5 of Rio Tinto Group (LSE:RIO) is 4487. The lower the ERP5 rank, the more undervalued a company is thought to be. The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength. The score helps determine if a company’s stock is valuable or not. The Piotroski F-Score of Rio Tinto Group (LSE:RIO) is 7. A score of nine indicates a high value stock, while a score of one indicates a low value stock. The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue. The score is also determined by change in gross margin and change in asset turnover. Investors may be interested in viewing the Gross Margin score on shares of Rio Tinto Group (LSE:RIO). The name currently has a score of 40.00000. This score is derived from the Gross Margin (Marx) stability and growth over the previous eight years. The Gross Margin score lands on a scale from 1 to 100 where a score of 1 would be considered positive, and a score of 100 would be seen as negative. Price Index The Price Index is a ratio that indicates the return of a share price over a past period. The price index of Rio Tinto Group (LSE:RIO) for last month was 1.02182. This is calculated by taking the current share price and dividing by the share price one month ago. If the ratio is greater than 1, then that means there has been an increase in price over the month. If the ratio is less than 1, then we can determine that there has been a decrease in price. Similarly, investors look up the share price over 12 month periods. The Price Index 12m for Rio Tinto Group (LSE:RIO) is 1.11648. Price Range 52 Weeks Some of the best financial predictions are formed by using a variety of financial tools. The Price Range 52 Weeks is one of the tools that investors use to determine the lowest and highest price at which a stock has traded in the previous 52 weeks. The Price Range of Rio Tinto Group (LSE:RIO) over the past 52 weeks is 0.946000. The 52-week range can be found in the stock’s quote summary.
07/6/2019
11:22
grupo guitarlumber: DIRECTORS TALK Rio Tinto plc 10.7% Potential Decrease Indicated by Barclays Capital Posted by: Amilia Stone 7th June 2019 Rio Tinto plc with EPIC/TICKER (LON:RIO) had its stock rating noted as ‘Downgrades217; with the recommendation being set at ‘UNDERWEIGHT’ this morning by analysts at Barclays Capital. Rio Tinto plc are listed in the Basic Materials sector within UK Main Market. Barclays Capital have set their target price at 4000 GBX on its stock. This indicates the analyst believes there is a potential downside of -10.7% from the opening price of 4478 GBX. Over the last 30 and 90 trading days the company share price has increased 56 points and increased 335 points respectively. The 1 year high stock price is 4821 GBX while the year low share price is currently 3460 GBX. Rio Tinto plc has a 50 day moving average of 4,609.79 GBX and the 200 Day Moving Average price is recorded at 4,108.85. There are currently 1,261,305,013 shares in issue with the average daily volume traded being 3,023,103. Market capitalisation for LON:RIO is £56,828,097,360 GBP.
27/5/2019
08:01
grupo: BHP, Fortescue, & Rio Tinto higher as iron ore prices surge again James Mickleboro | May 27, 2019 | More on: BHP FMG MGX RIO ASX iron ore miners Although the market has had a subdued start to the week, that hasn’t stopped Australia’s leading iron ore producers from storming higher this morning. In morning trade the iron ore industry has been one of the best performing areas of the market thanks to yet another rise in the price of the base metal. Here’s the state of play at the time of writing: The BHP Group Ltd (ASX: BHP) share price is up 1.5% to $38.00. The Fortescue Metals Group Limited (ASX: FMG) share price has pushed 1.6% higher to $8.35. The Mount Gibson Iron Limited (ASX: MGX) share price has climbed 2.5% to $1.28. The Rio Tinto Limited (ASX: RIO) share price is 1.5% higher to $102.76. What happened with iron ore prices? Iron ore prices continued their rise on Friday and closed in on five-year highs. According to Metal Bulletin, the price of the benchmark 62% fines rose 1.5% to US$105.32 a tonne, leaving it trading within a whisker of its five-year high of US$105.78 a tonne. Gains were also made by both lower and higher grade ore. The price of the lower grade 58% fines rose 0.3% to finish the week at US$87.02 a tonne, whereas the higher grade 65% fines closed the week with a 0.7% gain to US$119.30 a tonne. What’s next for iron ore prices? The good news for shareholders of these miners is that all signs are pointing to further gains today after Chinese iron ore futures finished the week on a very strong note. In fact, futures contracts closed the week at a record high thanks to increasing demand from Chinese steel producers after a production ramp up and declines in stockpiles at Chinese ports. If this leads to further increases in iron ore prices this week, it wouldn’t be at all surprising to see the likes of BHP, Fortescue, and Rio Tinto continue their charge higher.
11/8/2017
10:36
christh: Why Rio Tinto Is 'Top Dividend-Paying Rock Stock' With 4.77% Yield (RIO) August 10, 2017, 09:57:43 AM EDT By DividendChannel.com, BNK Invest Rio Tinto plc (Symbol: RIO) has been named as the ''Top Dividend-Paying Rock Stock'', according to Dividend Channel , which published its most recent ''DividendRank'' report. The report noted that among shares of companies in the minerals and mining space, RIO displayed both attractive valuation metrics and strong profitability metrics. For example, the recent RIO share price of $46.16 represents a price-to-book ratio of 1.6 and an annual dividend yield of 4.77% - by comparison, the average stock in Dividend Channel's coverage universe yields 3.6% and trades at a price-to-book ratio of 2.3. The report also cited the strong semi-annual dividend history at Rio Tinto plc, and favorable long-term multi-year growth rates in key fundamental data points. The report stated, '' Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That's what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most 'interesting' stocks, meant for investors as a source of ideas that merit further research. '' The current annualized dividend paid by Rio Tinto plc is $2.200118/share, currently paid in semi-annual installments, and its most recent dividend ex-date was on 08/09/2017. Below is a long-term dividend history chart for RIO, which the report stressed as being of key importance. Indeed, studying a company's past dividend history can be of good help in judging whether the most recent dividend is likely to continue. http://www.nasdaq.com/article/why-rio-tinto-is-top-dividend-paying-rock-stock-with-477-yield-rio-cm830169
12/8/2016
10:13
christh: Rio Tinto: A Core Investment In The Mining Sector Despite The Dividend Cut Aug.10.16 | About: Rio Tinto (RIO) Rio Tinto reports acceptable half-year results and cuts the interim dividend by 58% to 45 cents. The dividend for the full year will be at least 110 cents. Higher free cash flow allowed to reduce net debt. If iron remains at $55, Rio Tinto will surely continue to make progress. Rio Tinto (NYSE:RIO), the world's second largest iron ore miner, reported half-year results on August 3. Underlying EBITDA fell 27% to $5,367M compared to $7,303M in the year before. Underlying earnings dropped 47% to $1,563M or $0.95 per diluted share. Strong free cash flow enabled the company to reduce net debt from $13.8B at the end of last year to $12.9B on June 30, and gearing was lowered from 23% to 21%. Underlying earnings are a key metric for Rio Tinto shareholders as they determine the dividend after the introduction of the new policy in February 2016. Total cash returns to shareholders shall be in a range of 40% to 60% of underlying earnings in aggregate through the cycle. The 45 cents interim dividend which was just declared is in the middle of that range and represents 52% of underlying earnings. Nevertheless, it is a 58% reduction compared to the last interim dividend of 107.5 cents. Rio Tinto also stated that for FY16, the board's intention is the final dividend paid next year will be at least 65 cents per share. Business Outlook After the recovery of prices from their 10-year lows at the beginning of the year, the importance of iron ore for Rio Tinto's profitability is as high as it used to be in the past. Iron ore represents 60% of underlying EBITDA in the first half of 2016 and 82% of underlying earnings before other items. Rio Tinto's Product Groups Product Group Revenue [$M] 1HY16 Revenue [$M] 1HY15 Underlying EBITDA [$M] 1HY16 Underlying EBITDA [$M] 1HY15 Underlying Earnings [$M] 1HY16 Underlying Earnings [$M] 1HY15 Iron Ore 6,303 7,004 3,438 4,010 1,743 2,100 Aluminum 4,553 5,455 1,076 1,688 377 793 Copper & Diamonds 2,453 3,263 655 1,335 -67 393 Energy & Minerals 2,960 3,524 531 620 82 74 Other operations/ other items/ exploration/net interest -4 -12 -337 -350 -572 -417 Total 16,293 19,234 5,367 7,303 1,563 2,923 Source: Company website. Iron ore is Rio Tinto's bright spot, and it will likely continue to be the driver for an improved business performance going forward. In 1HY16, Rio Tinto realized an average iron ore price of $44.5/wmt FOB basis, equivalent to $48.4/dmt. Pilbara cash unit costs fell to $14.30/ton, compared to $16.20 in the first half of 2015 . At present it seems that the iron ore price recovery can be sustainable, and assuming an average price of $55/dmt for the rest of the year, Rio Tinto's EBITDA in 2HY16 could grow by around $800M. All other segments had to face stronger headwinds in the first half-year, and combined underlying EBITDA fell 38% or $1,381M from $3,463M to $2,262M. This compares to a $572M EBITDA reduction corresponding to a 14% decline for the Iron Ore product group. Although some improvements can be expected in the second half of the year, the other product groups are unlikely to have a substantial positive impact on Rio Tinto's result. For Aluminum, the second largest segment, I expect a slightly improved performance based on constant volume and better pricing. Not much progress can be anticipated from Copper and Diamonds. Copper is one of the few disappointments in the commodity sector as prices remain at depressed levels, and the red metal did not benefit from the broad mining rally of 2016. Volumes will not contribute to growth either as Rio Tinto's production will essentially remain flat in the second half-year. Energy and Minerals is likely to see a stronger second half-year, driven by various factors. Prices for thermal coal recovered noticeably in recent months due to higher imports to China. Metallurgical coal prices are up as well inline with strong demand for steelmaking raw materials. The contribution of iron ore pellets from IOC (Iron Ore Company of Canada) which are reported under Energy and Minerals, will continue to increase on higher production volumes. All these trends point toward higher cash flows in the second half of 2016. Net cash generated from operating activities of $3.2B in 1HY16 was 24% lower than in 2015, but capital expenditures of $1.3B ($1.1.B less than last year) and raising $0.6B through asset sales increased cash generation, allowing Rio Tinto to reduce net debt by $0.9B. The reduced dividend in the second half-year will liberate additional cash. With the final payment in April 2016, the company distributed $1.9B to shareholders. The lower interim dividend of $0.45 will save Rio Tinto around $1.1B later in the year. On the other side, capital and exploration expenditures will increase based on Rio Tinto's guidance of $4.0B for FY16. New projects and primarily the development of the Oyu Tolgoi underground copper mine in Mongolia with a projected investment volume of $5.3B and the Amrun bauxite project in Queensland with $1.8B remaining will increase capex in the near future. They will bring expenditures up to $5.0B in 2017 and $5.5B in 2018, including around $2.0B of annual sustaining capex. Assuming an at least stable price environment for Rio Tinto's major products and predominantly iron ore, my estimation is that the company's operational performance will continue to improve which should lead to at least constant free cash flow. This should enable the company to reduce net debt further or possibly pay out more than the $1.10 minimum dividend. Share Price and Dividend With the strongest balance sheet and the lowest cost delivered to China, Rio Tinto remains the most solid of the major iron ore miners. This has not spared shares from falling nearly 50% to a low of $22 in January, but the stock has recovered nearly 50% since then. Compared with its peers BHP Billiton (NYSE:BHP) (NYSE:BBL) and particularly Vale SA (NYSE:VALE), Rio Tinto has been less volatile. Despite the dividend cut, Rio Tinto maintains an above average yield, higher than BHP's, not to mention Vale which suspended the dividend entirely. With the outlook of a minimum dividend of $1.10 for FY16, Rio Tinto yields 3.4%. As I said earlier, a healthy cash flow might even allow Rio Tinto to pay more than $0.65 final dividend, but it is too early to count on it yet. Conclusion Rio Tinto has mastered the commodity downturn quite well, and the stock bottomed earlier in the year. The company's balance sheet which already belonged to the strongest in the industry improved further after the debt repayment. I'm optimistic about Rio Tinto's near-term outlook and the stock remains one of the key holdings in my mining's portfolio. Disclaimer: Opinions expressed herein by the author are not an investment recommendation, any material in this article should be considered general information, and not relied on as a formal investment recommendation. Before making any investment decisions, investors should also use other sources of information, draw their own conclusions, and consider seeking advice from a broker or financial advisor. hTtp://seekingalpha.com/article/3998497-rio-tinto-core-investment-mining-sector-despite-dividend-cut
01/2/2016
18:28
christh: Will Rio Tinto cut its dividend? By Robert Sutherland Smith 29 January 2016 Rio Tinto (RIO) at 1724p, after the annual production figures. Could the market be considerably under-valuing Rio Tinto because it is too bearish about its cash position? I explain here why that may be the case. The Rio Tinto (RIO) share price (1724p last seen) gives a historic annual dividend yield of around 8.7% (at the current pound/dollar exchange rate of $1.44 to the pound). Rio does its accounting in dollars. In accordance with convention, that kind of super normal dividend yield implies a dividend cut which usually, but not always of course, choreographs with an improvement in the share price. The company is clearly preoccupied with costs according to the news of cost cutting and the sale of assets. This week it was confirmed that the company is to sell (subject to conditions) its coking coal asset Mount Pleasant, New South Wales, for a stated $830 million, which, added to disinvestments since January 2013, will take the total value of disposals to over $5 billion. However, the company is at the same time planning to increase its capital expenditure on big efficient mines elsewhere. Most notably, the extension of the Mongolian copper mine Oyu Tolgoi underground with $4.4 billion dollars of syndicated loan finance that will have to be serviced. There is also what is described as the prime Amrun Bauxite development which will take another $1.9 billion of project finance. So the picture of Rio Tinto as the company stripping out billions of dollars of costs and now, non strategic assets, has to be adjusted by thoughts about the costs related to expansion elsewhere. Against the background of weak iron ore, copper and coking coal commodity prices and geo political worries generally, the Rio Tinto share price has massively underperformed the FTSE100 Index in the last six months, falling by near 30% during a period when the market went down by only 11%. That fall crystallises concerns that the dividend may come under financial pressure as its cost competes with the cost of financing the project finance of these new investments. So the question now is will the Rio dividend will be cut – clearly the market thinks it will – with the current historic dividend now at 8.6%? That is clearly too high a dividend at which to sell these shares, if for no other reason than the fact that the cutting of such high dividends is usually taken by the market as a confidence indicator, leading to an improvement in the share price for that reason. Before considering the dividend outlook further, it is worth noting that this month’s production statement for the fourth quarter of 2015 and the year as a whole looks better than circumstances might suggest. I add that the statement gives volume details and not financial data, which will come in due course – with the publication of the annual report and accounting for last year. Because of Pilbara coming more fully on stream, the shipment and production figures for iron ore are notably impressive. For the whole of 2015 iron ore shipment and production rose eleven per cent in volume terms. The price might have fallen dramatically, but that is at least partly compensated for by the company selling more of it in 2015 than in 2014. With the exception of copper and titanium dioxide slag, all categories of production demand performed positively in 2015: bauxite plus four per cent; aluminium plus one per cent; hard coking coal plus 11%. Semi soft thermal coal production was the same as a year before, whilst the relatively small in size titanium dioxide slag saw production fall by a quarter. In short, Rio Tinto demonstrated efficiency across many segments of shipment and production, which justifies a relatively bullish view of the company’s operations, even markets like these. Returning to the question of the dividend, it is worth remembering that according to the last balance sheet dated 30th June 2015, the company had a strong cash position. Operating cash flow was $4.4 billion despite the fact that that the then statutory net income figures was down more than eighty per cent from the net profit figure published a year earlier. So although earnings were down by more than eighty per cent, operating cash flow was down by less than a quarter of that figure. A principle reason being that that the depreciation charge had risen by 2% to $2.3 billion – an amount almost three times the published net profit figure. The depreciation charge alone was more than enough to pay the dividend of $2.1 billion. It constituted a reliable 52% of total operating cash flow in the last June balance sheet. The total operating cash flow figure of $4.4 billion almost covered capital expenditure and the cost of dividends at $4.6 billion. Most significantly, quarter-end cash on 30th June was $11 billion – despite everything, 16.5% higher than a year earlier. I do not take a cut in the Rio dividend for granted. There are two reasons for considering a purchase of RIO shares at this low level: first, that the dividend will not be cut (in which case the shares are cheap); or that there might be such a cut, which is already discounted, prompting the shares to rise on relief, in which case the shares are also cheap. I cannot see the future and do not know what might or might not have been said by the company to analysts. But I am one who thinks there is a strong chance that the dividend will not be cut. The shares are selling at only 2.8 times last balance sheet cash or on my estimate around 600p a share. The market consensus estimates are that the annual dividend will rise a little (by a postulated 2.2%) this year to give a prospective estimated dividend yield of 8.8%. There seems to be a discrepancy between the analysts and the market in general. hxxp://masterinvestor.co.uk/commodities/will-rio-tinto-cut-its-dividend/?utm_source=Master+Investor&utm_campaign=514d46132c-Master_Investor_Daily_Bulletin2_1_2016&utm_medium=email&utm_term=0_25eff0bb7f-514d46132c-37479317
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