Rio Tinto announces another bumper dividend for investors despite profit slump as focus on cash flow pays off
Mining giant Rio Tinto has announced another bumper payout for investors despite falling profit.
The world’s largest iron ore producer reported underlying earnings of $11.8bn (£9.4bn) for 2023, down from $13.4bn (£10.6bn) a year earlier – in line with LSEG estimates – due to lower commodity prices.
Rio Tinto also booked a net impairment charge of $0.7bn (£0.6bn) after tax. The charge was related to its alumina refineries in Queensland.
The company reported earnings before interest, taxes, depreciation and amortisation (EBITDA) $23.9bn (£19bn), slightly ahead of forecasts.
Despite weaker earnings, the group said it will pay out $7.1bn (£5.6bn) in dividends – $4.35 (345p) per share – down 12 per cent from 2022’s distribution.
Rio Tinto said it advanced a number of projects during the year, including making significant progress at the Simandou iron ore project in Guinea and it achieved “first sustainable production at the Oyu Tolgoi copper-gold mine in Mongolia.” It added this flagship project remains on track to ramp up to 500 thousand tonnes of copper production per year from 2028 to 2036.
In aluminium Rio acquired a 50% equity stake in Matalco from Giampaolo Group for $738m (£545m) to “become a leader in recycled aluminium supply in North America.”
Rio noted it had “one of the most exciting exploration pipelines for many years.”
Commenting on the results Rio chief executive Jakob Stausholm said: “In 2023, we lifted our overall copper equivalent production by over 3% and delivered resilient financial results, with underlying EBITDA of $23.9bn, free cash flow of $7.7bn and underlying earnings of $11.8bn, after taxes and government royalties of $8.8bn. Our balance sheet strength enables us to continue to invest with discipline while also paying an ordinary dividend of $7.1bn, a 60% payout.
We will continue paying attractive dividends and investing in the long-term strength of our business as we grow in the materials needed for a decarbonising world.”