By David Winning
SYDNEY — Rio Tinto PLC said its annual net profit fell 41%, reflecting writedowns of a major copper investment in Mongolia and an Australian alumina refinery while gains on asset sales in 2018 weren’t repeated.
The world’s second-biggest miner by market value on Wednesday reported a net profit of US$8.01 billion for 2019, down from a profit of US$13.64 billion a year earlier. The result was dragged down by US$1.7 billion of impairment charges, primarily against the Oyu Tolgoi underground project in Mongolia and the Yarwun alumina refinery in Australia. This compared with US$4.0 billion of gains on asset sales in 2018, Rio Tinto said.
However, annual profit before one-off items was up 18% at US$10.37 billion, beating consensus expectations for an underlying profit of US$10.13 billion based on data compiled by FactSet. That reflected a 37% rise, compared with a year earlier, in the price of iron ore dug up at its operations in Australia’s Pilbara region, which more than offset a 3% drop in annual production of the commodity.
Directors declared a final dividend of US$2.31 a share, taking the company’s full-year dividend to US$3.82 a share. Also, Rio Tinto paid a special dividend worth US$0.61 per share in September. For 2018, the miner paid ordinary dividends totaling US$3.07 a share.
“Our world-class portfolio and strong balance sheet serve us well in all market conditions, and are particularly valuable in the current volatile environment,” said Chief Executive Jean-Sébastien Jacques. “We are closely monitoring the impact of the Covid-19 virus and are prepared for some short-term impacts, such as supply-chain issues.”