Rio Tinto reports underlying earnings of $4.5bn

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Argyle3 rdax
Argyle3 rdax

Mining giant Rio Tinto delivered a strong performance in 2015 with underlying earnings of $4.5 billion.

Image credit: www.riotinto.com. Photographer: Christian Sprogoe PhotographyDate: 27 July 2009
Image credit: www.riotinto.com. Photographer: Christian Sprogoe PhotographyDate: 27 July 2009

Rio Tinto Chief Executive Sam Walsh attributed the strong results to the range of decisive actions that the company made to preserve cash through further cost reduction, lower capital expenditure and the release of working capital.

He said these actions left the company “robustly positioned” to maintain both balance sheet strength and deliver shareholder returns through the cycle.

“This focus on cash resulted in operating cash flows of $9.4 billion. At the same time, we have significantly strengthened our balance sheet and finished 2015 with net debt of $13.8 billion, which is $700 million better than the $14.5 billion pro-forma position at the end of 2014,” Mr Walsh added.

Adertisement

“The continued deterioration in the macro environment has generated widespread market uncertainty. We are embarking on a new round of proactive measures to cut our operating costs by a further $1 billion in 2016 followed by an additional goal of $1 billion in 2017. We are also reducing our capital expenditure to $4 billion in 2016 and $5 billion in 2017, an overall reduction of $3 billion compared with our previous guidance.”

Rio Tinto chairman Jan du Plessis said the company’s Board yesterday sanctioned a final dividend of 107.5 US cents per share, bringing the 2015 full year dividend to 215 US cents per share, in line with 2014.

“Over the past five years we have returned more than $25 billion to our shareholders, underlining our commitment to shareholder returns. However, with the continuing uncertain market outlook, the board believes that maintaining the current progressive dividend policy would constrain the business and act against shareholders’ long-term interests,” Mr du Plessis said.

“We are therefore replacing the progressive dividend policy with a more flexible approach that will allow the distribution of returns to reflect better the company’s position and outlook. For 2016, we intend that the full year dividend will not be less than 110 US cents per share.”