Rio Tinto Posts Weak H1 Results Despite Improved Operations At Pilbara

Rio Tinto PLC RIO reported an H1 2023 sales revenue of $26.7 billion, down 10% Y/Y. 

The miner reported that iron-ore shipments from Pilbara reached 161.7 million tons, a 7% Y/Y increase, while production reached 160.5 million tons, up 7% Y/Y.

Mined copper production, on a consolidated basis, fell 1% Y/Y at 290,000 tonnes, mainly on decreased production from the Kennecott operation in the U.S.

Underlying EBITDA fell to $11.7 billion from $15.6 billion, led by improved operational performance with volume upliftment of 5% Y/Y. 

Underlying EPS fell 34% Y/Y to $3.52 in the first half of 2023.

As of June 30, 2023, net debt stood at $4.35 billion.

Operating cash flow fell 33% Y/Y to $6.98 billion in H1 2023.

Jakob Stausholm, CEO said, "Our disciplined investment in lifting the health of our assets and focus on culture, mindset and relationships is delivering results, with our Pilbara iron ore business consistently improving its performance with five consecutive quarters of year-on-year growth. We are taking real steps to shape our portfolio for the future, with first sustainable production from Oyu Tolgoi underground, just as we doubled our exposure through the acquisition of Turquoise Hill Resources."

"Last week we signed an agreement to form the Matalco aluminium joint venture to enter the exciting and fast growing aluminium recycling industry in North America. And the Simandou iron ore project in Guinea is advancing at pace, with final approvals expected later this year." 

2023 Guidance: Rio continues to expect full-year shipments for Pilbara to be at the upper half of the original guidance range of 320 to 335 million tonnes on continued operational improvements across the Pilbara system and Safe Production System implementation.

Rio expects 2023 bauxite production to be at the lower end of the 54 to 57 MT range on planned investment to recover lost production.

The company reaffirms Mined copper (consolidated basis) production outlook at 590 to 640 Kt for 2023. 

Price Action: RIO shares are trading lower by 2.16% at $68.30 premarket on the last check Wednesday.