Rio Tinto Increases Buyback, Pays Record Annual Dividend
February 07 2018 - 1:43AM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO) said it would buy back more stock
and pay a record annual dividend as the mining company reported a
90% rise in profit for 2017.
The Anglo-Australian miner said on Wednesday it will hand
shareholders a further US$1 billion via a share buyback, in
addition to the US$1 billion dedicated to repurchasing shares at
its fiscal half year. Rio Tinto also promised a full-year dividend
of US$2.90 a share, versus US$1.70 in 2016.
The company reported a net profit of US$8.76 billion for 2017,
up from US$4.62 billion the year prior. Underlying earnings,
stripping out one-off items, were up 69% at US$8.63 billion,
roughly in line with a US$8.71 billion median of seven analyst
forecasts.
Rio Tinto is enjoying a turnaround thanks to aggressive efforts
to reduce costs over the past few years and a more recent recovery
in prices for commodities such as iron ore and copper. As recently
as 2015, the miner recorded an annual loss and was forced to junk a
prized progressive dividend policy, which promised stable or rising
returns, to conserve cash.
"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.
Rio Tinto said it had boosted cash flow by US$400 million from
improved productivity, despite grappling with higher raw material
costs like other resources companies. Management hit a target to
strip out US$2 billion in cash costs midyear, six months earlier
than planned.
Rio Tinto said net debt reduced by 60% to US$3.85 billion. That
took its gearing--a measure of a company's debt relative to
equity--to 7% from 17% at the end of 2016.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 07, 2018 01:28 ET (06:28 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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