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Mining giant Rio Tinto's net earnings down 41% in 2022 due to 'challenging' market conditions

Kitco News

(Kitco News) - Global mining giant Rio Tinto today announced $12.4 billion in net earnings for 2022, 41% lower than 2021, reflecting the movement in commodity prices, the impact of higher energy and raw materials prices on its operations, and higher rates of inflation on operating costs and closure liabilities.

The company said that its $26.3 billion underlying EBITDA was 30% below 2021, with an underlying EBITDA margin of 45%; and $13.3 billion underlying earnings (underlying EPS of 819.6 US cents) were 38% below 2021.

The company reported $4.2 billion of net debt at year end, compared with net cash of $1.6 billion at the start of the year, primarily reflected the free cash flow of $9.0 billion, offset by $11.7 billion of cash returns to shareholders and $3.8 billion for the acquisitions of Turquoise Hill Resources and Rincon Lithium Project.

Rio Tinto also reported $8.0 billion full-year dividend, equivalent to 492 US cents per share. This represents 60% of underlying earnings, in line with the company’s shareholder returns policy.

CEO Jakob Stausholm commented, "Despite challenging market conditions, we remain resilient because of the quality of our assets, our great people and the strength of our balance sheet. That is why we delivered strong financial results with underlying EBITDA of $26.3 billion, free cash flow of $9.0 billion and underlying earnings of $13.3 billion, after taxes and government royalties of $8.4 billion. This enables us to continue to invest in strengthening the business while also paying a total dividend of $8.0 billion, a 60% payout, in line with our policy.

"The uplift in our operational performance, strengthening of external relationships and investment in the long-term strength of the business ensure we will be able to continue to pay attractive dividends and invest in sustaining and growing our portfolio, while contributing to society's drive to net zero."

Previously, Rio Tinto reported that its Pilbara operations produced 324.1 million tonnes of iron ore (100% basis) in 2022, 1% higher than 2021, while the company’s mined copper production of 521 thousand tonnes in 2022 was 6% higher than 2021.

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