Rio Tinto FY24 earnings fall short of estimates

(Sharecast News) - Mining giant Rio Tinto posted its weakest earnings in half a decade overnight, principally due to weaker iron ore prices. Rio Tinto said underlying earnings had dropped from $11.76bn in FY23 to $10.87bn in FY24, missing analysts' estimates, while EBITDA of $23.3bn also fell short of the $23.6bn consensus estimate. On a per share basis, earnings of $6.70 were short of expectations of $6.80 but Rio Tinto's final dividend of $2.25 per share was in line with expectations.

The FTSE 100-listed group did note that softer copper earnings as a result of weak demand out of China, were partly offset by a stronger performance by its aluminium wing and lower centralised costs. Underlying operating earnings for Rio Tinto's iron ore unit dropped 19% year-on-year, while its aluminium division reported a 61% year-on-year increase.

Net debt was also higher than predicted at $5.5bn as a result of increased capex and lower-than-expected contributions from its Simandou joint venture partner.

In a separate statement, Rio Tinto recommended shareholders vote against a resolution requesting a review of its dual-listed structure at its next annual general meeting in April.

"We are a global company, we have global investors, and London kind of works for us," said CEO Jakob Stausholm, who stated he doesn't believe that Rio would fundamentally change its value by swapping exchanges.

As of 0845 GMT, Rio Tinto shares were down 1.53% at 120.09p.

Reporting by Iain Gilbert at Sharecast.com