Rio Tinto PLC said its first-half profit fell by 28% as iron-ore prices weren't as strong and it grappled with rising costs, prompting a sharp cut in its midyear payout to shareholders.
The world's second-biggest mining company by market value reported net earnings of $8.91 billion for the six months through June, down from $12.31 billion a year earlier.
Underlying earnings fell by 29% to $8.63 billion, surpassing an $8.37-billion estimate compiled by Visible Alpha from 13 analysts' forecasts.
Rio Tinto said it would pay investors an ordinary dividend of $2.67 a share. The miner paid out $5.61 a share at the same time a year ago, which included a special dividend that wasn't repeated.
"The market environment has become more challenging at the end of the period," Chief Executive Jakob Stausholm said.
Rio Tinto's first-half iron-ore shipments from its Australian operations were 2% weaker than a year ago, and the price received for its ore was sharply lower, the company said earlier this month. Rio Tinto received an average $110.90 a wet metric ton for the commodity in the first six months of the year, compared to $154.90 a ton in the first half of 2021.
Iron-ore prices tumbled during the second quarter of the year as Covid-19 restrictions in China sapped steel demand. Rio Tinto is the world's top producer of iron ore, the main ingredient in steel, and sales of the commodity account for most of its earnings.
Rio Tinto benefited from a sharp rise in the value of aluminum during the period, as well as higher copper prices. The price of its aluminum surged by 45% year-on-year amid fears of disruption to Russian production, although the miner's own output fell due to reduced capacity at a smelter in British Columbia that followed a labor strike.
