Rio Tinto shares fall as lower iron ore pricing hits earnings
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More news: Rio Tinto shares dropped in early trade after the mining giant reported an 8% decline in full-year underlying earnings and declared its lowest total dividend since 2019.
Rio Tinto shares were down 2.8% to $118.54 at 11:25am AEDT.
However, RBC Capital Markets analyst Kaan Peker said the results were largely in line with estimates.
What they said: "[Rio Tinto] has delivered on strategy," Peker said. "It is one of the majors with better growth rates (3% p.a), in copper, iron ore and lithium."
"We are expecting it to perform inline with the sector, but we do have concerns going into the second half of the year, with first ore expected from Simandou and the possible impact to the iron ore market."
Rio Tinto posts worse-than-feared fall in profit, trims dividend as iron ore slumps
The news: Rio Tinto missed analysts’ expectations, reporting its smallest full-year underlying earnings in five years as weaker iron ore prices offset growth in its copper and aluminium businesses.
Rio also declared a lower-than-expected final dividend of USD2.25 per share, down from USD2.58 last year, and bringing total dividends to USD4.02 per share — the lowest since 2019.
The numbers: The company posted underlying earnings of USD10.9 billion for 2024, an 8% decline from USD11.8 billion in 2023, and falling short of the Visible Alpha consensus of USD11 billion.
Rio Tinto's preferred metric, underlying earnings before interest, tax, depreciation and amortisation, came in at USD23.2billion—slightly below the USD23.8 billion analysts had expected.
Iron ore earnings dropped 19% as the average price per tonne fell 10% due to weak demand from China’s struggling property sector and high portside inventories.
Meanwhile, Rio’s copper business saw a 75% rise in underlying operating earnings, driven by ramp-up at the Oyu Tolgoi mine in Mongolia, strong performance at Escondida in Chile, and higher refined copper production at Kennecott in Utah.
Aluminium earnings rose 61%.
The source: Rio Tinto releases
