Rio Tinto delivers underlying EBITDA of $26.3 billion and total dividends of 492 US cents per share

LONDON--(BUSINESS WIRE)--February 22, 2023-- 

Rio Tinto Chief Executive Jakob Stausholm said: "We are building a stronger Rio Tinto and delivering against our four objectives. Our operational performance has improved, as evidenced by a number of second half records being set at our Pilbara iron ore mine and rail system. We are also investing for the future, doubling our stake in the Oyu Tolgoi copper-gold project in Mongolia through the acquisition of Turquoise Hill Resources, progressing the Rincon Lithium Project in Argentina and reaching milestone agreements that underpin the long-term success of our Pilbara iron ore business.

"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.

"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."

 
                                                      Change    Change 
At year end                  2022     2021    2020   vs 2021   vs 2020 
Net cash generated from 
 operating activities 
 (US$ millions)            16,134   25,345  15,875     (36)%        2% 
Purchases of property, 
 plant and equipment and 
 intangible assets (US$ 
 millions)                  6,750    7,384   6,189      (9)%        9% 
Free cash flow(1) (US$ 
 millions)                  9,010   17,664   9,407     (49)%      (4)% 
Consolidated sales 
 revenue (US$ millions)    55,554   63,495  44,611     (13)%       25% 
Underlying EBITDA(1) 
 (US$ millions)            26,272   37,720  23,902     (30)%       10% 
Profit after tax 
 attributable to owners 
 of Rio Tinto (net 
 earnings) (US$ 
 millions)                 12,420   21,094   9,769     (41)%       27% 
Underlying earnings per 
 share $(EPS)$(1) (US 
 cents)                     819.6  1,321.1   769.6     (38)%        6% 
Ordinary dividend per 
 share (US cents)           492.0    793.0   464.0     (38)%        6% 
Special dividend per 
 share (US cents)              --    247.0    93.0    (100)%    (100)% 
Total dividend per share 
 (US cents)                 492.0  1,040.0   557.0     (53)%     (12)% 
Net (debt)/cash(1) (US$ 
 millions)                (4,188)    1,576   (664) 
Underlying return on 
 capital employed 
 (ROCE)(1)                    25%      44%     27% 
(1) This financial performance indicator is a non-IFRS (as defined 
below) alternative performance measure $(APM)$. It is used internally by 
management to assess the performance of the business and is therefore 
considered relevant to readers of this document. It is presented here 
to give more clarity around the underlying business performance of the 
Group's operations. APMs are reconciled to directly comparable IFRS 
financial measures on pages 68 to 77. Our financial results are 
prepared in accordance with IFRS -- see page 35 for further 
information. Footnotes are set out in full on page 17. 
 
 
   -- We are committed to having a safe work environment, preventing 
      catastrophic events and reducing injuries. We had a fourth year in a row 
      of zero fatalities and our all-injury frequency rate has remained stable 
      at 0.40. We continue to implement our safety maturity model which, as our 
      blueprint for safety, describes the systems and behaviours we apply to 
      create a strong safety culture. 

Solid financial results in 2022, set against a context of record prices in 2021

   -- $16.1 billion net cash generated from operating activities, 36% lower 
      than 2021. This included items of a non-recurring nature which were not 
      representative of the underlying strength of the performance of the 
      business, which, in aggregate, reduced operating cash flow by around $2 
      billion. See page 7 for more detail. Free cash flow1 of $9.0 billion 
      included capital expenditure of $6.8 billion, which decreased 9% as we 
      commissioned our current programme of Pilbara replacement projects, 
      notably Gudai-Darri. 
   -- $12.4 billion of net earnings, 41% lower than 2021, reflected the 
      movement in commodity prices, the impact of higher energy and raw 
      materials prices on our operations, and higher rates of inflation on our 
      operating costs and closure liabilities. Effective tax rate on net 
      earnings of 30.9% compared with 27.7% in 2021, with the increase being 
      primarily due to the $0.8 billion write down of deferred tax assets in 
      the US. 
   -- $26.3 billion underlying EBITDA1 was 30% below 2021, with an underlying 
      EBITDA margin1 of 45%. 
   -- $13.3 billion underlying earnings1 (underlying EPS1 of 819.6 US cents) 
      were 38% below 2021. 
   -- $4.2 billion of net debt1 at year end, compared with net cash1 of $1.6 
      billion at the start of the year, primarily reflected the free cash flow1 
      of $9.0 billion, offset by $11.7 billion of cash returns to shareholders 
      and $3.8 billion for the acquisitions of Turquoise Hill Resources (TRQ)2 
      and Rincon Lithium Project. 
   -- $8.0 billion full-year dividend, equivalent to 492 US cents per share. 
      This represents 60% of underlying earnings, in line with our shareholder 
      returns policy. 

Delivering on our strategy

   -- We have put climate change and the low-carbon transition at the heart of 
      our strategy. We are decarbonising our assets; helping our customers 
      decarbonise by developing new products and technologies; and growing in 
      materials enabling the energy transition. We will deliver our strategy 
      through four clear objectives, which guide how we operate. Progressing 
      our strategy and four objectives will ensure that we provide the 
      materials the world needs while maximising shareholder returns and 
      strengthening our position as a partner of choice for our customers and 
      other key stakeholders. 
   -- We continue our work on social licence to restore trust and rebuild 
      relationships, particularly with Indigenous peoples, with an absolute 
      determination to achieve impeccable ESG credentials: 
   -- We are implementing all recommendations from the comprehensive external 
      review of our workplace culture published in February to ensure that 
      everyone at Rio Tinto has a safe, respectful and inclusive workplace. 
      Some immediate actions include training 91% of more than 7,000 leaders in 
      2022 in the foundations of building psychological safety, exceeding our 
      target of 80%. 
   -- We increased our gender diversity by 1.4 percentage points to 22.9%, but 
      fell short of our target to raise female representation by two percentage 
      points. The increases were distributed across all levels of the 
      organisation with female senior leaders increasing from 27.4% to 28.3%. 
      We have also increased the number of Indigenous leaders in our workforce 
      to 46 (November 2020: 6), through internal promotion and recruitment. 
   -- In October, we published our second Communities & Social Performance 
      $(CSP.UK)$ progress report on actions addressing the 2020 Board Review of 
      Cultural Heritage Management. It includes direct feedback from the 
      Pilbara Traditional Owners and details the actions the company has taken 
      to rebuild relationships with Indigenous peoples and external 
      stakeholders. We are moving to a model of co-management of Country in our 
      Pilbara iron ore business, and we are updating agreements with Indigenous 
      peoples. In May, we signed a Heads of Agreement with the Puutu Kunti 
      Kurrama and Pinikura (PKKP) people which will guide the co-management of 
      Puutu Kunti Kurrama and Pinikura country where mining takes place. In 
      November, we agreed with the PKKP Aboriginal Corporation to create the 
      Juukan Gorge Legacy Foundation as part of a remedy agreement relating to 
      the destruction of the rock shelters at Juukan Gorge in May 2020. We also 
      signed an updated agreement with Yindjibarndi Aboriginal Corporation in 
      Western Australia in November and signed the first agreement with the 
      Pekuakamiulnuatsh First Nation in Quebec in December. 
   -- To achieve our objective of becoming the best operator, we continue to 
      roll out the Safe Production System (SPS). We achieved our SPS deployment 
      target for 2022 with 30 deployments across 16 sites, which resulted in 
      improved performance at those sites. Roll-outs are ongoing to 
      continuously improve safety, strengthen employee engagement and 
      sustainably lift operational performance across our global portfolio. 
   -- We made significant progress with our objective to excel in development 
      with the following key milestones in the year: 
   -- We delivered first ore from Gudai-Darri, our first greenfield iron ore 
      mine in the Pilbara in more than a decade. The ramp-up continues to 
      progress as planned, with the 43 million tonne per year capacity expected 
      to be reached on a sustained basis during 2023. 
   -- We agreed to enter a joint venture with China Baowu Steel Group Co. Ltd 

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February 22, 2023 00:35 ET (05:35 GMT)