Rio Tinto Likely To Pay Dividend in 2017 But Board to Decide--CFO
February 11 2016 - 6:00AM
Dow Jones News
By Alex MacDonald
LONDON-- Rio Tinto PLC (RIO) is likely to pay a dividend next
year despite volatile commodity prices but it's up to the board to
make a final decision, the company's Chief Financial Officer said
Thursday.
"I think it's highly unlikely" that Rio Tinto wouldn't pay a
dividend in 2017, Chris Lynch told an investor conference in
response to specific analyst question on the matter.
Rio Tinto, the world's second largest diversified miner by
market value after BHP Billiton Ltd (BHP, on Thursday said it would
payout at least $2 billion in dividends after scrapping a
progressive dividend policy that led the company to pay $4 billion
in dividends for 2015, up from $3.7 billion the year before and
$3.3 billion in 2013.
"A number of people have criticised a progressive dividend
policy in a cyclical industry," Chief Executive Sam Walsh said. "It
works to some extent in an up cycle, but in a down cycle it becomes
very difficult."
As a result the board took the decision to focus on ensuring
that Rio Tinto is able to maintain a strong enough balance sheet to
move solidly through the downturn cycle rather than focusing more
on the company's long term outlook, he said.
Mr. Walsh said the company feels comfortable that the dividend
payout guidance of at least $2 billion for this year is manageable
despite the commodity price uncertainty.
Rio Tinto's London shares fell more than 6% earlier in the day
before paring back losses to 1,696 pence a share, down 3% from
Wednesday.
-Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
February 11, 2016 05:45 ET (10:45 GMT)
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