(Reuters) – Rio Tinto reported its smallest full-year underlying earnings in five years on Wednesday that also came in below expectations, as lower prices for iron ore outweighed growth in its copper and aluminium businesses.
Iron ore prices moderated last year on weak demand from China’s struggling property sector and high portside inventories, which dented the miner’s earnings from the raw material used in steel making and offset growth in copper and aluminium segments.
Rio’s average iron ore price per tonne fell 10% for the year, compared with a year earlier. Consequently, underlying operating earnings for Rio’s iron ore division fell 19% for the year.
The world’s largest iron ore producer reported underlying earnings of $10.87 billion for 2024, compared with $11.76 billion a year ago. Visible Alpha consensus was for $11 billion.
Rio’s Aluminium business logged a 61% increase in annual underlying operating earnings.
Meanwhile, ramp-up at the Oyu Tolgoi mine in Mongolia, strong performance at Escondida in Chile and higher refined copper production at Kennecott in Utah following the restart of the smelter led to a 75% rise in underlying operating earnings for the company’s copper business.
Rio Tinto, which derives most of its profits from iron ore but is increasingly focused on copper, declared a final ordinary dividend of $2.25 per share, below last year’s $2.58.
The full-year dividend payout of $4.02 per share has been the lowest since 2019.
Rio expects total losses of 13 million tonnes from tropical cyclones, which have hit Australia’s west coast and snarled iron ore shipments so far this year.
It also expects Pilbara iron ore unit cash costs on a free-on-board basis to be between $23 and $24.5 per wet metric tonne for the current fiscal, slightly higher than the unit cost of $23 per tonne logged in fiscal 2024.
(Reporting by Himanshi Akhand and Roshan Thomas in Bengaluru; Editing by Anil D’Silva)
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