Rio Tinto 2023 profit falls 12%, but edges past expectations

Anglo-Australian miner Rio Tinto Ltd (ASX:RIO) clocked a weaker underlying profit for 2023 as softer iron ore prices and demand weighed on its topline, although the figure was still slightly above expectations on stronger production. 

Rio Tinto’s underlying profit- which excludes special items- fell about 12% to $11.8 billion in the year to December 31, coming in slightly above Bloomberg estimates of $11.66 billion. 

The miner declared a final dividend of $4.2 per share, bringing its full-year dividend to $7.1, down from $8.0 per share for 2022.

Rio’s consolidated sales revenue for 2023 was $54.04 billion, down slightly from $55.55 billion a year ago. The drop was driven largely by softer commodity prices and weaker demand in China, as the world’s largest iron ore importer grappled with a sluggish post-COVID recovery.

Rio Tinto’s annual iron ore shipments still rose 2% to 331.8 metric tons in 2023, which somewhat helped offset weaker sale prices. But the firm saw higher costs due to increased production, while its overall margins also fell. 

The firm forecast slightly higher iron ore unit cash costs at its flagship Pilbara iron ore operations- between $21.75 to $23.50 per wet metric ton, compared to 2023 costs of $21.5 wet metric ton.

The miner said it expects to spend about $1 billion per year in the coming years on advanced closure activities at several of its aging mines in Australia, which will likely be treated as one-off items.