Rio Tinto reported a mixed set of financial results for the first half of 2025, as softer commodity prices, surging capital expenditure, and steep US aluminium tariffs weighed on its performance.
Image source: Rio Tinto
The company reported net cash generated from operating activities of USD 6,924 million, down 1.9 per cent from USD 7,056 million in H1 2024, reflecting margin compression and elevated cost pressures.
Free cash flow declined sharply to USD 1,962 million, a 31 per cent fall from USD 2,843 million a year earlier, primarily due to a significant rise in investment. Capital expenditure, including purchases of property, plant, equipment, and intangible assets rose to USD 4,734 million, up from USD 4,018 million in H1 2024.
Sales revenue remained largely flat at USD 26,873 million, compared to USD 26,802 million in the same period last year.
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However, underlying EBITDA fell to USD 11,547 million, down from USD 12,093 million, while net earnings declined 22 per cent to USD 4,528 million, from USD 5,808 million in H1 2024.
Rio Tinto’s net debt soared to USD 14,597 million, nearly three times higher than the USD 5,077 million reported in H1 2024, highlighting the combined impact of rising capex and lower free cash generation.
Rio Tinto takes USD 321 million tariff hit in H1 2025
A major drag on earnings came from escalating US trade protectionism. Rio Tinto faced USD 321 million in tariff-related costs in H1 2025, as US import duties on Canadian aluminium jumped from 25 per cent to 50 per cent between March and June.
Rio exported 723,000 tonnes of aluminium, around 75 per cent of its Canadian output to the US during the period, leaving it highly exposed to the policy shift. Although the company increased premiums on US deliveries, including a rise in the Midwest premium to 66 cents/lb, the delayed response failed to fully offset the margin impact.
Rio Tinto Chief Executive Jakob Stausholm said, "We are delivering very resilient financial results with an improving operational performance helped by our increasingly diversified portfolio. Underlying EBITDA of USD11.5 billion and operating cash flow of USD 6.9 billion, despite a 13 per cent lower iron ore price, demonstrate the growing contribution from our Aluminium and Copper businesses and our Pilbara operations' strong recovery from the four cyclones in the first quarter. We are reporting underlying earnings of USD 4.8 billion (after taxes and government royalties of USD 4.8 billion)”.
He added, “Our strong cash flow enables us to maintain our practice of a 50 per cent interim payout with a USD 2.4 billion ordinary dividend, as we continue our disciplined investment in profitable growth while retaining a strong balance sheet”.
Rio Tinto’s outlook remains strong, with the company confident in its ability to deliver long-term value through best-in-class project execution, growing product demand, and a robust project pipeline. It expects solid mid-term production growth, backed by firm operational foundations.
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