Rio Tinto has announced US$7.2 billion of returns to shareholders comprising US$3.2 billion from operations and US$4.0 billion from asset disposals in its half-year report for 2018.
Rio Tinto (ASX:RIO, LSE:RIO, NYSE:RIO) has announced US$7.2 billion of returns to shareholders comprising US$3.2 billion from operations and US$4.0 billion from asset disposals in its half-year report for 2018.
As highlighted in the press release:
- Interim ordinary dividend announced today of US$2.2 billion, equivalent to 127 US cents per share, represents 50 per cent of underlying earnings.
- Additional share buy-back of US$1.0 billion in Rio Tinto shares announced today, to be completed by the end of February 2019.
- Underlying EBITDA of US$9.2 billion and margin of 43 per cent.
- Generated operating cash flow of US$5.2 billion, net of a US$1.2 billion payment to the Australian Tax Office pertaining to 2017 profits.
- Increase in capital expenditure to US$2.4 billion, with US$1.4 billion of investment in growth including the AutoHaul, Amrun and Oyu Tolgoi projects.
- Delivered underlying and net earnings of US$4.4 billion and free cash flow of US$2.9 billion.
- Ongoing reshaping of the portfolio with binding agreements for US$5.0 billion (pre-tax) of divestments announced in 2018 first half. The post-tax proceeds of US$4.0 billion will be returned to shareholders.
- In addition, on 12 July 2018, the group announced the signing of a non-binding heads of agreement to sell its interest in Grasberg for US$3.5 billion.
CEO of Rio, Jean-Sébastien Jacques said:
“We have reported another strong set of results with underlying EBITDA of US$9.2 billion and operating cash flow of US$5.2 billion. In a favourable market environment, our Tier 1 assets and strong operational capability have achieved a 43 per cent EBITDA margin. Inflationary pressures are being experienced across the industry, but we have been able to offset these through our mine-to-market productivity programme.
“As a result, we continue to deliver superior shareholder returns with a record interim dividend of US$2.2 billion and a US$1.0 billion top-up to our existing share buy-back programme. In addition, in 2018 we have announced US$5.0 billion of divestments. The board has today approved that these disposal proceeds, net of tax, will be returned to our shareholders, with the precise timing and form to be determined.
“We will continue to invest in tier 1 growth, further strengthen our portfolio and maintain a strong balance sheet in order to deliver superior returns to shareholders in the short, medium and long term.”