Rio Tinto pays record dividend after 90% annual profit jump

Rio Tinto rewarded shareholders Wednesday with a record dividend as the mining giant reported a bumper annual net profit of USD 8.76 billion in 2017, a 90 per cent jump as commodity prices strengthened.
The Anglo-Australian firm had posted USD 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 USD 8.63 billion, a 69 per cent rise from the previous period and broadly matching analysts' expectations.
The bulk of underlying earnings came from its main commodity, iron ore, at USD 6.69 billion.

The company issued a record full-year dividend of USD 5.2 billion -- USD 2.90 per share -- and announced a billion- dollar share buyback. The additional share buyback took the total declared cash returns to shareholders to USD 9.7 billion.

Shares in Rio closed 3.82 per cent higher at 78.31 Australian dollars in Sydney ahead of the results, in a rising market.
Rio said improving prices in all its commodities increased underlying earnings by USD 4.11 billion compared to 2016.
"Overall, it was a pretty good result," Fat Prophets resources analyst David Lennox told AFP.
"Pricing did all the heavy lifting for the year, they are still doing very well on (cutting) costs, and volumes -- which we thought would be a small negative -- have come in at a small positive (and) the balance sheet was squeaky clean."
The annual net profit was Rio Tinto's highest since 2010. It posted a loss of USD 866 million 2015 on the back of slumping prices.

The plunge in key metals prices saw major players embark on cost-cutting programmes.
Rio said it was able to cut costs of USD 400 million last year, as part of its drive to free up USD 5.0 billion in additional free cash flow from 2017 to 2021.
The miner also reduced net debt to USD 3.8 billion, and made USD 2.7 billion in divestments last year, including the sale of most of its Australian coal assets to China-backed Yancoal.
Capital expenditure was forecast by Rio to be about USD 5.5 billion this year and rise to USD 6.0 billion in 2019 and 2020.

Rio said the global economy remained supportive of the mining sector, adding that while growth in key commodities consumer China may slow modestly over the next six months, the outlook "remains positive in the medium to long-term".