LONDON (ShareCast) - (Sharecast News) - Rio Tinto halved its dividend as profits slumped by more than a third due to weaker iron ore prices on the back of slowing demand from China and higher costs.
Full-year earnings slumped 38% to $13.3bn (£11bn) while revenue for 2022 fell 13% to $55.5bn.

After a record payout last year Rio shareholders were told their final payout had been cut by more than half to $2.25. The total dividend was $4.92, higher than estimates.

However, Rio the world's top iron ore producer, said it was "very positive" on China's economic prospects after the country in January reopened its borders and eased quarantine requirements for travellers after three years of a draconian zero-Covid policy long with stimulus measures to boost the economy.

The mining giant also cut it capital expenditure forecast for 2023 to $8bn from $8-9bn. Rio said higher energy prices cut underlying core earnings by $1.17bn, mainly due to higher diesel prices.

"Rio Tinto's latest results illustrate how the mining industry's fortunes fluctuate from year to year," said AJ Bell investment director Russ Mould.

"Having enjoyed a boom in 2021, a pullback in commodity prices in 2022 has led to a big drop in both earnings and the dividend. This was already expected by the market, hence the mild share price reaction to the news.

"What happens next is more important - a reopening of the Chinese economy should in theory lead to a rise in commodity demand, helping to offset any potential weakness in other parts of the world."



Reporting by Frank Prenesti for Sharecast.com

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