Rio Tinto (ASX:RIO) has seen profits fall 41% in 2022, with lower iron ore prices forcing Rio to cut its full year dividend by 38% to US$4.92 per share.

The 60% payout, including a US$2.25 final dividend, was described by CEO Jakob Stausholm as the miner’s second biggest dividend in history after paying out US$7.93/sh in 2021, when it reported the biggest profit in the Anglo-Australian miner’s 150 year history.

For the full year Rio will pay out around $11.7b to shareholders, around $5.7b in the final divvie.

Lower commodity prices represented a US$8.1b hit to Rio’s earnings, which fell from US$37.72 billion in 2021 to US$26.27b, US$9.15b of that due to iron ore and US$733m in copper and provisional price impacts.

Inflationary pressures were evident as well, with general inflation carving US$1.478b out of its earnings, energy accounting for US$1.169b and cash costs behind US$2.202b in the earnings slide.

While the results were down, the combined full year and half year dividend was slightly above analyst consensus.

“We continue to focus on making lasting change to strengthen our workplace culture and to building better relationships with Indigenous peoples, communities and other partners. At all times we will seek to find better ways, in line with our purpose. We clearly have more to do but I am encouraged by the progress we are making,” Stausholm said.

“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.”

Rio produced 322Mt of iron ore in 2022 at unit costs of US$21.30/t, slightly above its US$19.50-21/t guidance, with copper output of 521,000t mined and 209,000t refined at C1 costs of US163c/lb.

It expects to produce 320-335Mt of iron ore at US$21-22.5/t in 2023, with mined copper production of 650-710,000t at US160-180c/lb and refined copper of 180-210,000t.



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