Rio Tinto pays record dividend after 90% profit jump

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Rio Tinto rewarded shareholders Wednesday with a record dividend as the mining giant reported a bumper annual net profit of 8.76 billion US dollars in 2017, a 90-percent jump as commodity prices strengthened.

Rio Tinto's office in Perth, Western Australia. /VCG Photo

The Anglo-Australian firm had posted 4.62 billion US dollars in annual profit in the previous financial year, turning around a loss in 2015 when key metals prices slumped and the growth in Chinese demand slowed.

"The strength of our cash flow is a result of resilient prices during the year coupled with a robust operational performance and a focus on mine to market productivity," chief executive Jean-Sebastien Jacques said in a statement.

He added that the firm's strong position had allowed it to "invest in high-value growth through the cycle, and consistently deliver superior cash returns to shareholders."

Underlying profit for the year to December 31 – a measure preferred by the world's second-largest miner – was 8.63 billion US dollars, a 69-percent rise from the previous period and broadly matching analysts' expectations.

The bulk of underlying earnings came from its main commodity, iron ore, at 6.69 billion US dollars.

Heavy machinery operating at Rio Tinto Group's Pilbara iron ore mine in Western Australia. /VCG Photo

The company issued a record full-year dividend of 5.2 billion US dollars – 2.90 US dollars per share – and announced a billion-dollar share buyback. Shares in Rio closed 3.82 percent higher at 78.31 Australian dollars in Sydney ahead of the results, alongside a rising market.

Rio said improving prices in all its commodities increased underlying earnings by 4.11 billion US dollars compared to 2016.

The miner reduced net debt to 3.8 billion US dollars, and made 2.7 billion US dollars in divestments last year, including the sale of most of its Australian coal assets to China-backed Yancoal.

Source(s): AFP