Rio Tinto’s Share Price Fell 2.22% on Its Mixed FY 2023 Results

The Rio Tinto plc (LON: RIO) share price fell 2.22% after releasing its financial results for 2023. The global mining conglomerate noted that it achieved a 3% increase in production due to strategic investments in enhancing its business operations. Net earnings attributable to Rio Tinto shareholders were $10.1 billion, following net impairment charges of $0.7 billion, primarily from its Australian alumina refineries.

The underlying EBITDA for the year ending December 31 stood at $23.9 billion, marking a 9% decrease from the previous year, while total sales revenue dropped by 3% to $54.0 billion. The net cash from operating activities also saw a 6% decrease, totalling $15.2 billion.

Underlying earnings amounted to $11.8 billion, resulting in an annual ordinary dividend payout of $7.1 billion, representing a 60% distribution rate. Commodity price fluctuations resulted in a $1.5 billion reduction in underlying profits for the year 2023, although this was somewhat mitigated by the strengthening of the US dollar and decreased energy costs. 

The year saw a 3% decline in average copper prices and a 17% decrease for aluminium, with diamonds and industrial minerals also experiencing price drops. Conversely, gold prices saw an 8% increase, and iron ore prices increased by 0.5%. 

Rio Tinto noted a positive impact of $0.6 billion on underlying EBITDA due to weaker local currencies against a stronger US dollar, which appreciated by 4% against Australian and Canadian dollars.

Additionally, a decline in energy prices provided a $0.4 billion boost to underlying EBITDA, primarily through reduced diesel prices. Despite an increase in the final dividend to 4.2 cents per share from 3.7 cents in 2022, the total yearly dividend was reduced to 7.1 cents, a 12% decrease from the previous year.

Rio Tinto Chief Executive Jakob Stausholm said: “We are making clear progress as we shape Rio Tinto into a stronger and even more reliable company. By focusing on our four objectives, we are building a portfolio that is fit for the future – including our Oyu Tolgoi underground copper mine in Mongolia and Guinea's Simandou iron ore project. Over the past month, we have taken significant steps towards our target to halve our global Scope 1 & 2 carbon emissions this decade with agreements to contract future renewable wind and solar power for our Gladstone operations.”

Rio Tinto share price. 

The Rio Tinto share price fell 2.22% to trade at 5105.5p from Tuesday’s closing price of 5221.5p.