Price, Productivity Aid Rio Tinto Cash Flow -- Commodity Comment
07 Febbraio 2018 - 9:20AM
Dow Jones News
Rio Tinto PLC (RIO.LN) reported a 90% rise in 2017 net profit to
US$8.76 billion and said it would pay shareholders a record
full-year dividend. It also announced plans to buy back a further
US$1 billion in stock, on top of the US$1 billion dedicated to
repurchasing shares in mid-2017.
Here are some remarks from Rio Tinto's 2017 earnings report:
On cash flow:
"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. Our strong balance sheet,
world-class assets and disciplined allocation of capital puts us in
the unique position of being able to invest in high-value growth
through the cycle, and consistently deliver superior cash returns
to shareholders."
On prices:
"The effect of all price movements on the group's commodities in
2017 was to increase underlying earnings by $4,107 million compared
with 2016. The Platts price for 62% iron Pilbara fines was 20%
higher on average compared with 2016. Realized hard-coking-coal
prices were 42% higher on average compared with 2016 and realized
thermal-coal prices averaged 32% higher. Earnings and cash flows
were also boosted by higher average prices for copper and
aluminium, which were up 27% and 23%, respectively,
year-on-year."
On capital expenditure:
"Capital expenditure expected to remain at around $5.5 billion
in 2018 and around $6 billion in each of 2019 and 2020. Each year
includes approximately $2.0-2.5 billion of sustaining capex."
On sales:
"Movements in sales volumes increased earnings by $114 million
compared with 2016. The main contributors were higher iron-ore
shipments from the Pilbara, a 20% increase in titanium dioxide slag
feedstock sales volumes and a 6% rise in bauxite sales."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 07, 2018 03:05 ET (08:05 GMT)
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