Business Performance Review of One of The Leading Mining Groups: Rio Tinto Plc

  • Dec 07, 2019 GMT
  • Team Kalkine
Business Performance Review of One of The Leading Mining Groups: Rio Tinto Plc

Rio Tinto Plc

Rio Tinto Plc (LON: RIO) supplies metals and minerals. The major products of the company are diamonds, gold, uranium, borates, titanium dioxide & salt, aluminium, copper and iron ore. These essential materials are used in smartphones, planes, cars, hospitals and throughout the home. The company has a workforce of 47,000 people in almost 35 countries across six continents. It is Melbourne, Australia based company which is strongly represented in North America and has expanded its businesses in Asia, Europe, Africa and South America. The company has formed a partnership with auto industry leaders for creating alloys which help to lighten and making fuel-efficient vehicles.

News Updates

On 5th December 2019, the company announced to repurchased 83,116 ordinary shares of 10 pence each on London stock exchange (LSE) from J.P. Morgan Securities Plc.

On 4th December 2019, the company announced its decision of slashing its operations at Richards Bay Minerals in South Africa for the safety and security purpose of the employee because of violence in the communities near the operations.

On 3rd December 2019, the company announced to repurchased 88,119 ordinary shares of 10 pence each on London stock exchange (LSE) from J.P. Morgan Securities plc. The company's share buy-back programme is set for completion by 28th February 2020.

The company on the same day also announced the approval for an investment of $1.5 billion to keep going its Kennecott copper operation in the USA. The investment has been made for a period over six years and will provide an extension of operation till 2032 at Kennecott.

On 2nd December 2019, the company announced to repurchase 79,648 ordinary shares of 10 pence each on London stock exchange (LSE) from J.P. Morgan Securities plc.

On 15th November 2019, the company announced to support Energy Resources of Australia Ltd for a renounceable entitlement deal to collect $324 million (Australian $476 million) for the restoration in Australia's Northern Territory for Ranger Project Area.

On 27th November 2019, the company announced the approval of an investment of AUS $1 billion in its Greater Tom Price operations to boost the production volume of iron ore big business in Western Australia.

On 23rd October 2019, the company announced its intention to conduct a strategic review to check the feasibility and competitive status of its interest in New Zealand's Aluminium Smelter at Tiwai Point.

On 1st August 2019, the company announced its an interim dividend to be paid for US shareholder of 151.00 cents per share and a special dividend of 61.00 cents per share for the half-year ending 30th June 2019. An interim dividend and special dividend were to be paid for Australian shareholder of 219.08 cents and 88.50 cents per ordinary share, respectively. An interim dividend and special dividend were to be paid for British shareholder of 123.32 pence and 49.82 pence per ordinary share, respectively.

Financial Highlights

On 16th October 2019, the company published a press release to announce its third-quarter production result. The Pilbara iron ore shipments and Pilbara iron ore production were higher in the third quarter by 5% and 6% as compared to the third quarter of 2018. The production of Bauxite, Titanium dioxide slag and IOC Iron ore pellet & concentrate were higher in the third quarter of 2019 by 9%, 8% and 3% respectively as compared to the third quarter of 2018. In contrast, the production of Aluminium and Mined Copper were lower in the third quarter of 2019 by -3% and -1% respectively as compared to the third quarter of 2018.

(Source: LSE)

On 1st August 2019, the company published a press release to announce its interim result for the six-month ended 30th June 2019. The company announced shareholders returns of $3.5 billion, which includes $2.5 billion of interim and a separate special dividend of $1.0 billion. The company’s net cash generated from operating activities increased to $6.4 billion in H1 FY19 from $5.2 billion in H1 FY18. The company’s capital expenditure increased slightly to $2.391 Billion in H1 FY19 from $2.363 Billion in H1 FY18. The underlying EBITDA improved by 11 per cent to $10.2 billion in first half of FY19. The company’s underlying earnings per share increased by 19 per cent to 301.5 cents in H1 FY19 from 253.6 cents in H1 FY18.

The net gearing ratio was 10% as at 30th June 2019 as compared to (1) % as at 31st December 2018. The return on capital employed was 23% as of 30th June 2019 as compared to 19% as of 31st December 2018.]

(Source: LSE)

 

Share Price Performance 

On 6th December 2019, while writing at 08:36 AM GMT, RIO shares were clocking a current market price of GBX 4,184.00 per share; which was higher by 1.32% as compared to the last traded price of the previous day. The company’s market capitalisation was at £51.85 Billion at the time of writing.

On 3rd July 2019, the shares of RIO had touched a new peak of GBX 4,979.14 and reached the lowest price level of GBX 3,306.25 on 06th December 2018 in the last 52 weeks range. The company’s shares were trading at 15.96 per cent lower from the 52-week high price mark and 26.54 per cent higher than the 52-week low price mark at the current trading level.

The Beta was 1.42 at the time of writing which shows the volatility is higher as compared with the index taken as the benchmark. Additionally, the annual dividend yield and share outstanding of the company are 5.57% and 1.62 billion at the time of writing.

Outlook

The Robe River Joint Venture sustaining production projects is moving ahead with the environmental and heritage approval process. The company is also continuously researching on the Jadar lithium-borate project in Serbia for forming the economic business case. Additionally, Rio Tinto and Chinalco, who have 45.05% and 39.95% stake on Simandou, are looking forward to working with the government of Guinea to explore world-class iron ore deposit.

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK