(Correcting iron portside sales in China were up in 2022 from 2021.)
Rio Tinto PLC on Wednesday joined peers in making a discretionary cut to its dividend, as it reported a steep drop in annual profit due to falling prices for iron ore.
For 2022, the Anglo-Australian mining and metals company declared a final dividend of $2.25 from $4.17 a year prior.
This amounted to a total dividend of $4.92, down from $7.93 in 2021, but marginally above analyst expectations. Berenberg expected a total dividend of $4.80, while AJ Bell’s Russ Mould echoed market consensus of $4.82.
On Tuesday, fellow miner BHP Group Ltd cut its half-year dividend to 90 cents from 150 cents a year prior. Fortescue Metals Group Ltd, the Perth-based iron ore company, similarly slashed its interim dividend to 75 Australian cents from 86 cents the year before.
Rio Tinto, which has numerous assets worldwide, reported pretax profit of $18.66 billion, down 39% from $30.83 billion a year prior.
Revenue decreased to $55.55 billion, 12% lower than $63.50 billion in 2021, but marginally above JPMorgan analyst expectations of $52.49 billion.
Net earnings fell 41% to $12.4 billion from $21.1 billion the previous year. Rio Tinto attributed this to movement in commodity prices, alongside the impact of higher energy and raw materials prices on operations, and higher rates of inflation on operating costs and closure liabilities.
Across its product suite, the company received an average iron ore price of $97.6 per wet metric tonne, compared to $132.3 per tonne the previous year. This equates to $106.1 per dry metric tonne, down from $143.8 per dry metric tonne.
Iron ore portside sales in China were reported at 24.3 million tonnes in 2022, up from 14.0 million tonnes in 2021.
For 2023, Rio Tinto lowered its capital investments guidance to $8 billion from a prior estimate of between $8 billion and $9 billion. However, it raised its estimates for 2024 and 2025 to between $9 billion and $10 billion.
‘Despite challenging market conditions, we remain resilient because of the quality of our assets, our great people and the strength of our balance sheet,’ said Chief Executive Jakob Stausholm.
‘Our operational performance has improved, as evidenced by a number of second half records being set at our Pilbara iron ore mine and rail system. We are also investing for the future, doubling our stake in the Oyu Tolgoi copper-gold project in Mongolia through the acquisition of Turquoise Hill Resources, progressing the Rincon lithium project in Argentina and reaching milestone agreements that underpin the long-term success of our Pilbara iron ore business.’
Rio Tinto shares closed 0.5% lower at A$125.51 each in Sydney on Wednesday. They were down 3.0% to 6,018.00 pence in London.
Copyright 2023 Alliance News Ltd. All Rights Reserved.
