Rio Tinto, trading as NYSE:RIO, is a leading global mining group that focuses on finding, mining, and processing mineral resources. The company operates in various segments, including iron ore, aluminum, copper, and diamonds. It competes with other major mining companies like BHP and Vale. On February 19, 2025, RIO reported its earnings, revealing an EPS of $3.18, slightly below the estimated $3.23.
Despite the slight miss in EPS, RIO's financial performance remains robust. The company reported actual revenue of $27.29 billion, just under the estimated $27.35 billion. This strong performance is underpinned by an underlying EBITDA of $23.3 billion, even with an 11% decrease in iron ore prices. This indicates effective cost management and operational efficiency.
RIO's strategic portfolio mix and effective working capital management have led to an increase in net cash generated from operating activities, reaching $15.6 billion. This financial strength is further highlighted by a net earnings figure of $11.6 billion, showcasing the company's ability to generate profit despite market challenges.
The company declared a full-year ordinary dividend of $6.5 billion, maintaining a 60% payout ratio. This continues RIO's nine-year track record of consistent dividend payments, reflecting its commitment to returning value to shareholders. The company's P/E ratio of 9.51 and earnings yield of 10.52% indicate a favorable market valuation of its earnings.
RIO's financial health is further supported by a low debt-to-equity ratio of 0.26, suggesting a conservative approach to leveraging. The current ratio of 1.70 indicates a strong ability to cover short-term liabilities with short-term assets, ensuring liquidity and financial stability.
