Rio Tinto annual profit falls 37.9% on slower China demand

(Reuters) – Rio Tinto posted a 37.9% drop in annual profit and more than halved its dividend on Wednesday, as iron ore prices fell on slower demand, particularly from China, while higher labour and material costs also ate into earnings.

Strict COVID-19 curbs in top steel producer China curtailed economic activity last year, pulling down iron ore prices from lofty levels scaled a year earlier.

Rio Tinto last year earned an average realised price of just $106.1 per dry metric tonne (dmt) of iron ore, compared with $143.8 per dmt in 2021.

Apart from higher wages due to a shortage of skilled labour, the Anglo-American miner had to pay more for fuel and raw materials.

The company, one of the world’s top iron ore producers, reported underlying earnings of $13.3 billion for 2022, compared with a record $21.4 billion in 2021 and a Refinitiv estimate of $13.8 billion.

It declared a full-year dividend of $4.92 per share, down from 2021’s record payout of $10.40 per share.

(Reporting by Harish Sridharan and Harshita Swaminathan in Bengaluru; Editing by Subhranshu Sahu)