Rio Tinto Slashes Dividend By 46% As Profit Slumps Due To Metal Price Meltdown Fueled By China's COVID Wave

Rio Tinto Plc RIO slashed its dividend Wednesday on weak demand for iron ore, aluminum and copper from a lockdown-hit China after posting lackluster FY22 results.
The result added to a disappointing season for the biggest miners as they battled lower metals prices and rising energy and labor costs, Bloomberg reports.
Like its rival BHP Group Limited BHP, also hit by the slump in China, Rio is optimistic about a turnaround in its biggest market after the end of Covid Zero.
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China’s property sector, a key driver of Rio’s revenues, returned to a “decent state” after the sharp slowdown of recent times, CEO Jakob Stausholm said on an earnings call. Europe’s economy is faring better than expected, he said.
Rio’s underlying profit fell 38% to $13.28 billion in 2022, lagging behind the estimates. Consolidated sales revenue declined by 13% Y/Y to $55.55 billion.
Rio proposed a final dividend per share of $2.25, down from $4.17 in the previous year.
The company also said that inflationary pressures were softening as supply chains started to ease up and gas prices fell, but it added that “direct flow through to the cost base will take time.”
Rio’s CFO Peter Cunningham said the company saw overall headline inflation moderate. “There’s still very tight labor market in Australia and parts of the U.S. and Canada,” he said.
Miners are coming off a volatile year for industrial metals, with record prices in the first half giving way to a second-half slump amid fears for the global economy.
RIO Price Action: Rio Tinto shares are trading 0.92% higher at $85.79 premarket Wednesday.