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.
Grafico Azioni Rio Tinto (NYSE:RIO)
Storico
Da Feb 2024 a Mar 2024 Clicca qui per i Grafici di Rio Tinto
Grafico Azioni Rio Tinto (NYSE:RIO)
Storico
Da Mar 2023 a Mar 2024 Clicca qui per i Grafici di Rio Tinto