Rio Tinto post steady final results, boosted by rising iron prices

Rio Tinto plc (LON:RIO) have produced a steady set of final results that have been published on Wednesday.

Shares in Rio Tinto trade at 3,918p (+0.064%). 26/2/20 10:25BST.

The firm said that revenues had risen across 2019, which was largely down to rising iron prices – however profits dipped slightly across the year.

In Rio Tinto’s 2019 financial year, the firm noted that sales revenue climbed 6.5% to $43.17 billion from $40.52 billion, but pretax profit slumped 35% to $11.77 billion from $18.20 billion.

Looking at net losses, the mining titan reported that they faced a $291 million net loss on consolidation and disposals, compared to a $4.6 billion surplus just one year ago.

Notably, impairment charges faced were $3.49 billion, which was a significant increase from the $132 million gain in 2018.

Rio Tinto added that its full year ordinary dividend per share was 24% higher at 382 cents from 307 cents – however total dividend fell 19% to 443.0 cents from 550.0 cents in 2018.

The mining firm also noted that they are currently assessing the impact of the coronavirus on operations and production, which the firm said could cause uncertainty in the short term.

“Our world-class portfolio and strong balance sheet serve us well in all market conditions, and are particularly valuable in the current volatile environment. We are closely monitoring the impact of the Covid-19 virus and are prepared for some short-term impacts, such as supply-chain issues. Our products are currently reaching our customers.

Full year production guidance remained consistent, however full year guidance at the Pilbara iron ore operations were slashed following damaged caused by cyclone Damien.

Going forward, mined copper production is expected lie within the 530,000 to 570,000 tonne ball park, which is below total 2019 output of 577,000 tonnes.

Finally, aluminium production is expected to be between 3.1 and 3.3 million, which remains consistent with last year’s total figure.

Rio Tinto Chief Executive J-S Jacques said:

“We have again delivered strong financial results with underlying EBITDA of $21.2 billion, underlying EBITDA margin of 47% and return on capital employed of 24%. This performance allows us to return a record final ordinary dividend of $3.7 billion, resulting in a full-year ordinary dividend of $6.2 billion and total cash returns of $7.2 billion.

“In line with our disciplined approach to capital allocation, we invested $2.6 billion in development projects, including high-return iron ore and copper. Longer term, our $624 million exploration and evaluation expenditure in 2019 adds to our pipeline of attractive options.

“Our resilience and value over volume strategy mean we can invest in our business and deliver superior returns to shareholders in the short, medium and long term.”

Rio Tinto face damage from Cyclone Damien

Just over a week ago, Rio Tinto noted that they would be lowering their annual shipments guidance.

The firm said that shipments are expected to be lower at its iron ore operations in Western Australia following damage caused by Cyclone Damien.

Across 2020, the FTSE 100 lister miner now expects shipments at its Pilbara operations to be between 324 million and 334 million. Notably, this sees a formidable slump from previously guided range which was in the 330 million and 343 million ball park.

In 2019, Rio Tinto reported iron ore shipments at Pilbara of 327 millions which saw a 3% slip on 2018 – which gave shareholders a pre warning before the final results were announced today.

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