Eyes Down For Rio Tinto plc’s Results

It’s been a strong first half for Rio Tinto plc (LON: RIO).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Rio TintoWe have first-half results from Rio Tinto (LSE: RIO) (NYSE: RIO.US) due on Thursday 7 August, and thanks to a first-half production report released in July, we know they’re going to be good.

Telling us of “very strong first half production“, the update revealed new records for first-half iron ore shipments, production and rail volumes.

Record production

Rio’s iron ore production in the second quarter came in at 73.1 million tonnes, up 10% on the same quarter a year previously and up 11% on the first quarter this year. The half saw a 10% rise over the same period last year, to 139.5 million tonnes.

There have been fears raised of overproduction of iron, but it seems that Rio can shift everything it can dig up, with actual iron ore shipments racing ahead of production and drawing down stocks.

For the six-months, we heard of iron ore shipments reaching 142.4 million tonnes for a rise of 20%, with Q2 bringing in a 23% rise over Q1 to 75.7 million tonnes.

Much of this success was due to the firm’s Pilbara iron ore development, which was ramped up to a production rate of 290 million tonnes a year two months ahead of schedule — and Rio says it is on track for a capacity of 360 million tonnes a year by the end of the first half of 2015.

Copper doing well

Copper production also rose impressively, up 28% in the second quarter and up an overall 23% in the half. And the company has lifted its production guidance for the valuable metal after the half saw higher grades and better recovery at Kennecott Utah Copper and a ramp-up in production at Oyu Tolgoi.

Chief executive Sam Walsh said that “we continue to transform Rio Tinto into a stronger, more disciplined business that will consistently deliver strong cash flows and shareholder value“.

Laying the foundations

The Rio Tinto share price has spiked up a little, but forecasts still put it on a relatively modest forward P/E of 11.5 with a dividend yield of 3.6% predicted. But the Rio Tinto story isn’t really about this year, or even next — it’s about the longer term, for which the firm’s current efforts are building a firm foundation.

I’m looking forward to decent figures and a strong forward outlook on 7 August.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.

More on Investing Articles

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »