Rio Tinto pays record dividend after 90% annual profit jump

The Anglo-Australian firm had posted US$4.62 billion in annual profit in the previous financial year, turning around a loss in 2015 when key metals prices slumped and the growth in Chinese demand slowed.

“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 in a statement.

He added that the firm’s strong position had allowed it to “invest in high-value growth through the cycle, and consistently deliver superior cash returns to shareholders”.

Underlying profit for the year to December 31 — a measure preferred by the world’s second-largest miner — was US$8.63 billion, a 69 percent rise from the previous period and broadly matching analysts’ expectations.

The bulk of underlying earnings came from its main commodity, iron ore, at US$6.69 billion.

The company issued a record full-year dividend of US$5.2 billion — US$2.90 per share — and announced a billion-dollar share buyback.

Shares in Rio closed 3.82 percent higher at Aus$78.31 in Sydney ahead of the results, alongside a rising market.

Rio said improving prices in all its commodities increased underlying earnings by US$4.11 billion compared to 2016.

The miner reduced net debt to US$3.8 billion, and made US$2.7 billion in divestments last year, including the sale of most of its Australian coal assets to China-backed Yancoal.