Rio Tinto Stock Dips On Weak FY22 Results, Dividend Cut

Shares of Rio Tinto Plc were losing around 3 percent in the morning trading in London and above 2 percent in pre-market activity on the NYSE after the Anglo-Australian mining giant reported Wednesday weak profit and sales for its fiscal 2022. Further, the company trimmed its dividend for the year and also backed fiscal 2023 production forecast.

Rio Tinto Chief Executive Jakob Stausholm said, “Despite challenging market conditions, we remain resilient… The uplift in our operational performance, strengthening of external relationships and investment in the long-term strength of the business ensure we will be able to continue to pay attractive dividends and invest in sustaining and growing our portfolio, while contributing to society’s drive to net zero.”

Looking ahead for fiscal 2023, the company continues to project Pilbara iron ore shipments, 100 percent basis in a range of 320 million tonnes to 335 million tonnes, compared to last year 322 million tonnes.

Bauxite production would be 54 to 57 million tonnes, compared to prior year’s 55 million tonnes. The company also projects higher production of Alumina and Aluminium, but weak production of diamonds, among others.

For the year, the company announced a final dividend of 225 US cents or 326.49 Australian cents. The total dividend per share would be 492.0 US cents, down 53 percent from last year. This represents 60 percent of underlying earnings, in line with shareholder returns policy.

Rio Tinto plans to pay final dividend on April 20 to holders of ordinary shares and holders of ADRs on the register at the close of business on March 10.

In fiscal 2022, profit attributable to owners dropped 41 percent to $12.42 billion from last year’s $21.09 billion.

The annual profit drop reflected the movement in commodity prices, the impact of higher energy and raw materials prices on the company’s operations, and higher rates of inflation on operating costs and closure liabilities.

Underlying earnings per share were 819.6 US cents, down 38 percent from 1,321.1 US cents last year. Underlying EBITDA dropped 30 percent to $26.27 billion, with an underlying EBITDA margin of 45 percent.

Consolidated sales revenue declined 13 percent to $55.55 billion from $63.50 billion a year ago.

Compared to 2020, attributable profit grew 27 percent, underlying earnings per share increased 6 percent, underlying EBITDA grew 10 percent, and sales revenue went up 25 percent.

On a segmental basis, fiscal 2022 iron ore segmental revenue was $30.91 billion, down 22 percent from last year. Average realised price fell 26 percent to $106.1 per dry metric tonne, FOB basis. Underlying EBITDA of $18.6 billion was 33 percent lower than 2021, due to lower prices

In fiscal 2022, Pilbara production (100 percent) grew 1 percent from last year to 324.1 million tonnes, while Pilbara shipments remained flat at 321.6 million tonnes. Salt production – Rio Tinto share was 5.8 million tonnes, down 2 percent.

Aluminium segmental revenue grew 11 percent. Bauxite production went up 1 percent, but Alumina and Aluminium production fell 4 percent each.

Copper segmental revenue fell 14 percent, despite higher profduction.

In London, Rio Tinto shares were trading at 6,020.44 pence, down 2.96 percent. In pre-market activity on the NYSE, the shares were trading at $73.82, down 2.07 percent.

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