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Rio Tinto posts lower FY profit

Rio Tinto CEO Jakob Stausholm

Rio Tinto CEO Jakob Stausholm

21st February 2024

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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Diversified mining major Rio Tinto CEO Jakob Stausholm on Wednesday reported “resilient” financial results for 2023, with free cash flow of $7.7-billion and underlying earnings of $11.8-billion.

Balance sheet strength enabled Rio Tinto to invest with discipline, while also playing an ordinary dividend of $7.1-billion, which equated to a 60% payout, he said.

Underlying earnings a share decreased from 824.7c a share in 2022, to 725c a share in 2023.

Profit after tax, or net earnings, decreased from $12.29-billion to $10.06-billion, after a A$0.7-billion net impairment, which mainly related to Australian alumina refineries.

Lower prices for Rio Tinto’s commodities on the back of supply growth outpacing modest demand growth, resulted in a $1.5-billlion decline in underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) in 2023.

Higher realised pricing in iron-ore was offset by lower pricing for copper, diamonds and industrial minerals, the company reported.

While inflation has eased, Rio Tinto reported that the lagged effects continue to show in its third-party costs, such as contractor rates, consumables and some raw materials.

Temporary operational issues at Kennecott, in the US, and at Iron Ore Company of Canada reduced underlying Ebitda by $0.6-billion, while other cost pressures and weaker demand lowered underlying Ebitda by $1-billion.

Meanwhile, Stausholm said Rio Tinto continued to make progress in shaping the group into a “stronger and even more reliable company”.

“By focusing on our four objectives, we are building a portfolio that is fit for the future - including our Oyu Tolgoi underground copper mine in Mongolia and the Simandou iron-ore project in Guinea. We have taken significant steps over the past month towards our target to halve our global Scope 1 and 2 carbon emissions this decade with agreements to contract future renewable wind and solar power for our Gladstone operations,” he said.

Edited by Creamer Media Reporter

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