Rio Tinto to Pay Special Dividend After Profit Jumps 56%
27 Febbraio 2019 - 07:48AM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO.LN) said it will pay a special
dividend worth US$4 billion as it recorded a 56% rise in annual net
profit.
The world's second-biggest miner by market value on Wednesday
reported a net profit of US$13.64 billion for 2018, up from a
profit of US$8.76 billion a year earlier. The jump was tied to the
sale of its US$3.5-billion stake in Freeport-McMoRan Inc.'s (FCX)
Grasberg copper mine in Indonesia.
Rio Tinto said it would use the cash from that sale to fund a
special dividend of US$2.43 per share, which fattened a capital
return that has also involved buying back shares worth up to US$3.2
billion.
Directors declared a final dividend of US$1.80 a share, taking
the company's full-year dividend to US$3.07 a share. For 2017, the
miner paid ordinary dividends totaling US$2.90 a share.
Rio Tinto, one of the world's top iron-ore suppliers, said
profit before one-off items was up 2% at US$8.81 billion
underpinned by steady prices for commodities such as iron ore. That
exceeded consensus expectations for an underlying profit of US$8.53
billion, based on the median of seven analyst forecasts compiled by
The Wall Street Journal.
The miner said it swung to a net cash position of US$255 million
at the end of December, from net debt of US$3.85 billion a year
ago, even as free cash flow fell 27% in the year.
Rio Tinto has been boosting returns to investors after a sharp
slump in commodity prices a few years ago sent it scrambling to
strengthen its balance sheet. As recently as 2015, the miner
recorded an annual loss and was forced to junk a formerly prized
progressive dividend policy, which promised stable or rising
returns, to conserve cash.
The miner finalized the sale of its Grasberg mine stake in
December. The sale was part of a deal struck between Rio Tinto,
Freeport and Jakarta to give Indonesia majority control of the
mine, one of the world's largest sources of copper.
The Anglo-Australian mining company has also benefited from
firmer prices of commodities, particularly iron ore, which accounts
for roughly three in every five dollars that Rio Tinto earns.
Rio Tinto shipped more iron ore from its Australian mining
operations in 2018 as it increased output from its newest mine and
worked others harder, the company said last month.
The miner said it shipped 338.2 million metric tons of iron ore
from its pits in the remote Pilbara region in northwest Australia,
up 2% on 2017. Rio Tinto typically earns a margin of more than 60%
from its iron ore business.
Rio had also recorded a jump in copper output, although said it
produced slightly less bauxite and aluminum.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 27, 2019 01:33 ET (06:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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