Rio delivers $US6b cash bonanza
Rio Tinto has posted a 9 per cent fall in annual underlying earnings to $9.3 billion and announced a big cash payout to shareholders as promised.
The mining giant announced 12 per cent jump in its final dividend to $US2.15, along with a $2 billion share buyback.
The company's critical iron ore division delivered underlying earnings of $US8.1 billion, which was slightly above expectations, but still represented a 18 per cent fall on the previous year's figure of $US9.9 billion.
Rio Tinto chief executive Sam Walsh said the company had delivered on its commitment of a material increase in cash returns to our shareholders.
He said the dividend and buyback represented a total cash return to shareholders of almost $US6 billion.
"Our continued financial and operating discipline enabled us to offset much of the impact of lower commodity prices in 2014," he said.
"By increasing volumes and reducing costs, we achieved underlying earnings of $9.3 billion and we were able to maintain our EBITDA margin at 39 per cent.
"Free cashflow was assisted by a further reduction in capital expenditure and a successful program to release working capital.
"As a consequence, we have reduced net debt by $US5.6 billion to $US12.5 billion."
Mr Walsh said the operating environment remained tough, with lower commodity prices and uncertain global economic trends.
"However, in these conditions Rio Tinto's qualities and competitive advantages deliver superior value," he said.
"Our combination of world-class assets, disciplined capital allocation, balance sheet strength, operating and commercial excellence, and a culture of safety and integrity gives me confidence in our ability to continue to generate sustainable returns for our shareholders."
Rio Tinto announced today that board members, non executive directors John Kerr and Michael Fitzpatrick, would retire after the company's annual general meeting in Perth on May 7.
Rio shares closed up 10 cents, or 0.17 per cent, at $59.90 in a broadly weaker market.
