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Did You See Rio Tinto Limited’s Results?

Rio Tinto Limited (ASX: RIO) shares fell 1.8% on Thursday following the release of its 2017 full year results.

In an announcement to the ASX on Wednesday, the $130 billion mining heavyweight revealed its financial performance for the year ended 31 December 2017.

Here is the key news (all figures are in USD):

  • Revenue of $40 billion, up from $33.7 billion
  • Net profit was $8.8 billion on a statutory basis, up from $4.8 billion
  • A final dividend of $2.90 per share was declared, up 71%
  • Capital expenditure rose 49% to $4.5 billion
  • Net debt dropped from $9.6 billion to $3.8 billion

“Today we have announced a strong set of results with operating cash flow of $13.9 billion, a record full year dividend of $5.2 billion and an additional $1 billion share buy-back,” Rio Tinto CEO, J-S Jacques said. “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.”

In addition to the financials noted above, Rio Tinto announced an additional $1 billion share buyback to be completed by the end of 2018.

“Our strong balance sheet, world-class assets and disciplined allocation of capital puts us in the unique position of being able to invest in high-value growth through the cycle, and consistently deliver superior cash returns to shareholders,” Jacques added.

Throughout 2017 Rio Tinto returned the equivalent of $9.7 billion to shareholders, with $5.2 billion of dividends, $2 billion of share buybacks and a $2.5 billion supplementary share buyback for the Coal & Allied proceeds.

Turning to the performance of key commodities, Rio Tinto’s total revenue from iron ore jumped from $14.6 billion up to $18.2 billion. Rio Tinto said its iron ore prices rose 20% on average, compared to the year prior.

Revenue from aluminium rose from $9.4 billion to $11 billion, with net earnings rising from $947 million to $1.6 billion. Average sales prices of aluminium were $1,969 per tonne, up 23%.

Copper & Diamonds revenue rose modestly to $4.8 billion, while the Energy & Minerals division, which includes Rio Tinto’s coal and uranium assets among other things, achieved net earnings of $1.2 billion up from $612 million.

Looking ahead, Rio Tinto’s production targets remain unchanged. The miner is targeting free cash flow productively benefits to the tune of $5 billion between 2017 and 2021, including $0.3 billion in 2018.

Rio Tinto shares were trading 1.8% lower at $76.90 on Thursday. 

Rio Tinto competitor BHP Billiton Limited (ASX: BHP) is expected to report its half-year results February 20th.

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