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(Correcting iron portside sales in China were up in 2022 from 2021.)
(Alliance News) - 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 USD2.25 from USD4.17 a year prior.
This amounted to a total dividend of USD4.92, down from USD7.93 in 2021, but marginally above analyst expectations. Berenberg expected a total dividend of USD4.80, while AJ Bell's Russ Mould echoed market consensus of USD4.82.
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 USD18.66 billion, down 39% from USD30.83 billion a year prior.
Revenue decreased to USD55.55 billion, 12% lower than USD63.50 billion in 2021, but marginally above JPMorgan analyst expectations of USD52.49 billion.
Net earnings fell 41% to USD12.4 billion from USD21.1 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 USD97.6 per wet metric tonne, compared to USD132.3 per tonne the previous year. This equates to USD106.1 per dry metric tonne, down from USD143.8 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 USD8 billion from a prior estimate of between USD8 billion and USD9 billion. However, it raised its estimates for 2024 and 2025 to between USD9 billion and USD10 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 AUD125.51 each in Sydney on Wednesday. They were down 3.0% to 6,018.00 pence in London.
By Holly Beveridge; Alliance News reporter
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