Rio Tinto FY profits rise on higher iron ore prices
Rio Tinto on Wednesday reported an 18% rise in full year underlying earnings on the back of soaring iron ore prices, offsetting lower shipments in 2019.
The company said it was prepared for the short-term impact to supply chains from the coronavirus outbreak.
Underlying earnings for the year to December 31 rose to $10.37bn from $8.81bn a year earlier. Net profit fell to $8.01bn from $13.64bn after a $1.7bn impairment charges, mainly against the Oyu Tolgoi underground project in Mongolia and the Yarwun alumina refinery in Australia.
A final dividend of 231 cents a share was declared for a final total of 382 cents.
“We are currently evaluating the impact of the Covid-19 virus, which could create significant uncertainty for our business in the near term. All our operations are looking at opportunities to adjust to the impact of the Covid-19 virus on market conditions,” Rio said on Wednesday.
Capital expenditure was expected to be around $7bn in 2020, after the deferral of $500m from 2019, and around $6.5bn in each of 2021 and 2022. Each year includes sustaining capex of around $2.5bn per year, of which $1bn - $1.5bn for Rio's Pilbara iron ore business.
The company also pledged to reduce its greenhouse gas emissions to zero by 2050 and spend $1bn over the next five years in climate-related projects. Rio targeted a 30% cut in emissions intensity from its operations and an extra 15% reduction in absolute emissions by 2030.