Rio Tinto PLC (LON:RIO) has increased its half-year dividend in a show of strength despite revenue and profits shrinking.
The Anglo-Aussie mining giant declared an interim ordinary dividend of 155 US cents per share, up 3% year on year, and equivalent to a total payment of US$2.5bn.
Revenues for the first six months of the year came in at US$19.4bn, down 7% on this time last year due to lower prices and volumes for copper and lower aluminium prices.
Profits before tax of US$5.3bn were up almost 2% while underlying profits (EBITDA) fell 6% to US$9.6bn.
Net debt increased to US$4.8bn from US$3.7bn at the end of December.
Chief executive Jean-Sébastien Jacques said: "We have been agile and adapted our way of working, to deliver another resilient performance while navigating the new and ongoing challenges of dealing with COVID-19.”
He said the strong level of EBITDA, with a margin of 47%, “driven by our strong and stable operations, with all of our assets continuing to operate throughout the half” had resulted in the decision to declare the dividend.
Jacques, who earlier this month reconfirmed production guidance for the rest of the year across all commodities, said the giant Simandou iron ore deposit in Guinea "progressing" and later insistent to reporters that it will be built "under all scenarios".
Rio shares were up over 1% to 4,828p on Wednesday morning.
Analysts at UBS said 'clean' EBITDA was 4% above the consensus forecasts and net debt was in line.
The iron ore price is “the key driver near-term”.
--Adds broker comment--