Rio Tinto's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

Recognised as a global mining powerhouse, the Rio Tinto group continues to impress. This is illustrated by the company's strong financial performance in the 2020 financial year. In particular, it recorded a strong increase in annual profit. This has enabled it to propose a record dividend for the year. Find out more about the group's performance this year.

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Rio Tinto's market cap, dividends, sales and earnings in 2020

Financial performance in 2020

For the full twelve months of the 2020 financial year, Rio Tinto achieved revenues of $44.6 billion, compared with $11.1 billion in 2019. This is an increase on the previous year. The group's net profit for the year was $9.8 billion, up 20% year-on-year.

This strong performance was helped in particular by the rise in iron ore prices. It is also its best annual profit since 2011. Underlying profit (an indicator excluding impairments and exceptional items) was $12.4 billion for the year, up 20% year-on-year.

This result came in above market expectations. The market expected an average of $12.02 billion. Iron ore accounted for almost 90% of the company's profits. In 2020, the price of this metal rose by 70% to its highest level in nine years.

In terms of investments made during the year, the Anglo-Australian mining giant spent nearly $160 million to replace butterfly valves at the Isle-Maligne hydroelectric power station. Also, as part of its efforts to modernise the Vaudreuil plant, the company invested approximately $70 million.

Finally, the mining group injected $11 million to increase recycling capacity at the Laterrière plant.

 

Mixed results in the Aluminium Division

The Aluminium Division experienced a slowdown in activity during the 2020 financial year. For the year as a whole, the group saw its primary aluminium sales fall by 3% compared to the previous year. This is due in particular to the fall in the world economy linked to the coronavirus epidemic.

Also, the price of this metal fell by 9% on average over the year 2020. In addition, Rio Tinto's aluminium business recorded a fall in profits over the year under review. They fell by 6% to $2.15 billion. However, alumina production increased by 4% and bauxite production increased by 2%.

 

Other highlights of the 2020 financial year

Apart from the financial results, there was another highlight of Rio Tinto's 2020 financial year. This was the scandal that occurred in May. It relates to the explosive destruction of the Juukan Gorge cave in Western Australia for the expansion of an iron ore mine. This is a 46,000 year old historic site and part of Australia's Aboriginal heritage.

The Puutu Kunti Kurrama and Pinikura (PKKP) people consider it a sacred place. Following this event, Jean-Sébastien Jacques, the company's managing director, was forced to resign. This was also the case for two other senior officials of the group.

To replace Mr Jacques, the Dane Jakob Stausholm was appointed head of the Rio Tinto mining group in December 2020. He took office on 1 January 2021. Furthermore, the new director did not fail to point out the exceptional year that the company has had in terms of financial performance.

Moreover, he said he was aware of the importance of restoring trust with the indigenous people and other stakeholders in this scandal.

 

About Rio Tinto's dividend and market capitalisation

Building on its strong 2020 results, Rio Tinto has announced the largest dividend in its history. The world's largest iron ore miner has decided to pay a record dividend of $3.08 per share for the 2020 financial year, compared to a coupon of $2.31 per share in the previous year.

The mining group also announced a special dividend of $0.93 per share for the same year. In total, the amount paid out to shareholders in dividends is estimated to be more than $9 billion, the largest amount since the company's inception.

In addition, Rio Tinto is one of the most popular stocks for investors in the stock market. The company is dual-listed as it is controlled by two separate entities. The first, Rio Tinto Plc, is listed on the London Stock Exchange and is included in the FTSE 100 index.

The second entity is called Rio Tinto Ltd. It is listed in Australia and is a constituent of the S&P/ASX 200 Index. As of early December 2021, Rio Tinto's total market capitalisation is estimated to be over $100 billion.

 

More about Rio Tinto

Founded in 1873, Rio Tinto is an Anglo-Australian multinational mining group. It is based in Australia and North America. The company has two headquarters, one in Melbourne and one in London. Globally, it is one of the major players in the search for, exploration and exploitation of iron ore, aluminium, industrial minerals, copper, diamonds and coal.

However, most of the group's turnover is generated by iron ore. In addition, the company reports a notable presence in several countries on five continents. The majority of its profits are generated in the United States, China and Asia. Next are the European markets, Australia and Canada.

However, the group's mining assets are mainly concentrated in the latter two countries. In addition, Rio Tinto is known worldwide for exporting its minerals to all continents. This is based on a very effective (long-term) expansion strategy.

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