OF INTEREST28 Feb 2017 19:19
Higher iron ore prices boosted Rio’s profit 12% to $5.1 billion last year, a significant turnaround from 2015, when it posted its worst underlying earnings in 11 years
FEBUARY 8th 2017
Rio is in good shape today,” chief executive officer Jean-Sébastien Jacques said on a call with reporters after the results. “We have kept our promises. We have delivered cost savings. We have strengthened the quality of our portfolio. We are investing for the long term and at the same time we have strengthened our balance sheet.”
Prices for iron ore, which accounts for almost 90% of Rio's earnings, are near a two-year high, trading Wednesday at $83.53 a tonne, according to the Metal Bulletin Index.
The company, which is also the world’s No. 2 iron producer, said it will pay a bigger-than-expected annual dividend of $1.70 per share and announced a $500-million buyback, taking shareholder returns to about 70% of underlying earnings.
2016 full year results Page 1 of 47 Rio Tinto announces cash generation of $8.5 billion and $3.6 billion of shareholder returns 8 February 2017 Rio Tinto chief executive J-S Jacques said: “Today’s results show we have kept our commitment to maximise cash and productivity from our world-class assets, delivering $3.6 billion in shareholder returns while maintaining a robust balance sheet. At the same time, we strengthened the portfolio and advanced our high-value growth projects as we look to the future. “We enter 2017 in good shape. Our team will deliver $5 billion of extra free cash flow over the next five years from our productivity programme. Our value over volume approach, coupled with a robust balance sheet and world-class assets, places us in a strong position to deliver superior shareholder returns through the cycle.” 2016 highlights – Generated strong operating cash flow of $8.5 billion and underlying earnings of $5.1 billion. – Achieved $1.6 billion of pre-tax sustainable operating cash cost improvements. 1 – Investing in three major growth projects in bauxite, copper and iron ore. – Optimising the portfolio with disposals of $1.3 billion announced or completed in 2016 and up to $2.45 billion announced to date in 2017. – Strengthened the balance sheet further with net debt reduced to $9.6 billion. – Returning cash to shareholders with $3.6 billion announced with respect to 2016: full year dividend of 170 US cents per share, equivalent to $3.1 billion. share buy-back of $0.5 billion in Rio Tinto plc shares over the course of 2017. in total, represents 70 per cent of 2016 underlying earnings. Year to 31 December 2016 2015 Change Net cash generated from operating activities (US$ millions) 8,465 9,383 -10% Underlying earnings2 (US$ millions) 5,100 4,540 +12% Net earnings / (loss) (US$ millions) 4,617 (866) n/a Capital expenditure3 (US$ millions) (3,012) (4,685) -36% Underlying earnings per share
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