Anglo-Australian miner Rio Tinto has posted its best underlying earnings since 2011 on higher iron ore prices, but warned that the coronavirus outbreak could hurt business in the short term.
The coronavirus outbreak has weighed on China’s economy and BHP Group warned earlier this month that demand this year could take a hit if the fallout extended beyond March.
“We are closely monitoring the impact of the Covid-19 virus and are prepared for some short-term impacts, such as supply-chain issues. Our products are currently reaching our customers,” Chief Executive Officer Jean-Sébastien Jacques said in a statement.
The world’s top iron ore producer said underlying earnings for the full year ended December 31 rose to $US10.37 billion ($A15.76 billion), from $US8.81 billion ($A13.39 billion) a year earlier. It was slightly under a consensus estimate of $US10.40 billion ($A15.81 billion) by 17 analysts compiled by research firm Vuma Financial.
Rio also declared a final dividend of $US2.31 ($A3.51) per share, higher than $US1.8 ($A2.7) per share in 2018, but did not announce a special dividend like last year.
Iron ore miners have all cashed in on high prices for the steel-making commodity last year following supply disruption in Brazil and robust Chinese demand.
China’s iron ore imports were at their second-highest level in 2019, fuelled by strong demand at steel mills. Prices in Shanghai
Underlying earnings from iron ore, which accounts for about 85 per cent of Rio’s underlying earnings, surged 48 per cent to $US9.64 billion ($A14.65 billion) in the year.