(Reuters) - Global miner Rio Tinto said on Wednesday its full-year profit rose 69 percent in 2017, boosted by higher prices for commodities such as iron ore and coal, announcing an additional $1 billion share buyback and a record dividend.
Underlying earnings for the 12 months ended Dec. 31 rose to $8.63 billion from $5.10 billion a year earlier, roughly in line with analyst estimates of about $8.74 billion, according to Thomson Reuters I/B/E/S.
Rio Tinto declared a full-year dividend of $2.90 per share, up from $1.70 a share a year ago, while operational cash flow jumped more than 60 percent to $13.9 billion.
"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.
Rio said higher commodity prices helped drive full-year revenues up 18.3 percent to $40 billion.
Iron ore, Rio's biggest income generator, contributed $6.69 billion in underlying earnings for the full-year. Prices for the steelmaking ingredient were this week around $75 per tonne, after last year fluctuating in a range between $53 and $95.
Australia's government last month said it expected iron ore prices to average $51.50 a tonne this year, down 20 percent from 2017 on rising global supply and moderating demand from China. However, that is out of step with some private forecasts, with UBS and Citi calling for iron ore prices to average around $64 a tonne in 2018.
Solid Chinese demand for commodities has been translating into handsome returns by big miners in the form of dividends and buybacks. Last year alone Rio's share buybacks totaled $4 billion, partly supported by the sale of some coal assets.
Rio said it expected to complete its latest buyback of Rio Tinto Plc shares by the end of this year.
It maintained its 2018 capital expenditure forecast at around $5.5 billion, while keeping its 2018 production guidance intact after raising its iron ore shipments target by 10 million tonnes last month.
(Reporting By Rushil Dutta in Bengaluru; editing by Richard Pullin)
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