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Rio Tinto reports $8.9 billion in net earnings in H1 2022, announces interim dividend of $4.3 billion

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(Kitco News) - Rio Tinto today announced a $10.5 billion net cash generated from its operating activities in H1 2022, which was 23% lower than H1 2021, flowed through to 30% lower free cash flow of $7.1 billion, which included a 6% decrease in capital expenditure to $3.1 billion.

The company also reported $8.9 billion in net earnings, 28% lower than 2021 first half, primarily due the movement in commodity prices, the impact of higher energy prices on the company’s operations and higher rates of inflation on its operating costs and closure liabilities.

Rio Tinto’s $8.6 billion underlying earnings (underlying EPS of 532.7 US cents) were 29% below 2021 first half with a 25.2% effective tax rate on underlying earnings, compared with 28.8% in 2021 first half.

The company also posted $0.3 billion of net cash at 30 June 2022, which compared with net cash of $1.6 billion at the start of the year, reflected the free cash flow of $7.1 billion, offset by $7.6 billion of cash returns to shareholders and the $0.8 billion Rincon acquisition.

Importantly, Rio Tinto announced interim ordinary dividend of $4.3 billion, its second highest ever interim, equivalent to 267 US cents per share. This represents 50% of underlying earnings, in line with the company’s shareholder returns policy, and consistent with its practice of paying out 50% on the ordinary interim dividend.

CEO Jakob Stausholm commented, "Market conditions were good, albeit below last year's record levels. We delivered largely flat production and solid financial results, with underlying EBITDA of $15.6 billion, free cash flow of $7.1 billion and underlying earnings of $8.6 billion, after taxes and government royalties of $4.8 billion. As a result, we are paying our second highest ever interim dividend of $4.3 billion, a 50% payout, in line with our policy. The market environment has become more challenging at the end of the period.

"We remain focused on delivering on our long-term strategy, with a steady improvement in operating performance and some notable advances in our growth agenda. We continue to strengthen our partnership with the Mongolian government following commencement of underground mining at Oyu Tolgoi, delivered first iron ore from the Gudai-Darri mine and approved early works funding at the Rincon lithium project."

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