Shares in mining giant Rio Tinto (RIO) traded flat at £39.15 in mid-morning despite the FTSE 100 firm reporting a 41% fall in annual profit, cutting its dividend and warning Covid-19 could create ‘significant uncertainty’ for its business.

In its full year results to 31 December 2019, Rio reported net attributable profit of $8bn, down from $13.6bn the previous year.

It declared a record final dividend of $2.31 a share, though its total payout for the year – including interim and special dividends – stood at $4.43 per share, down 19% from the $5.50 a share total dividend in 2018.

In addition, Rio also warned the coronavirus could create ‘significant uncertainty for our business in the near term’. It added, ‘All our operations are looking at opportunities to adjust to the impact of the Covid-19 virus on market conditions.’

However, it wasn’t all bad for the firm with 2019 revenue of $43.2bn, up from $40.5bn in 2018, and underlying EBITDA of $21.2bn, up from $18.1bn, coming in slightly ahead of analyst expectations, with the growth driven mainly by higher iron ore prices.

Net debt stood at $3.65bn, compared to net cash of $0.26bn in 2018, but this was mainly due to $11.9bn of cash returns to shareholders through dividends and share buybacks, as well as a $1.2bn hit from new accounting rules.

Another notable part of Rio’s results was an update on its climate change strategy.

The miner, which unlike some of its peers doesn’t extract fossil fuels, is aiming for net zero emissions from its operations by 2050.

It added that its overall growth between now and 2030 will be carbon neutral, underpinned by $1bn of climate-related spend over the next five years.

But unlike competitors such as BHP (BHP) and Glencore (GLEN), the company has refused to set targets for carbon emissions produced by its customers, called scope 3 emissions.

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Issue Date: 26 Feb 2020