Rio Tinto announces full-year ordinary dividend of $6.2 billion (382 US cents per share), including record final ordinary div...
26 February 2020 - 5:08PM
Business Wire
Rio Tinto Chief Executive J-S Jacques said “We have again
delivered strong financial results with underlying EBITDA of $21.2
billion, underlying EBITDA margin of 47% and return on capital
employed of 24%. This performance allows us to return a record
final ordinary dividend of $3.7 billion, resulting in a full-year
ordinary dividend of $6.2 billion and total cash returns of $7.2
billion.
“In line with our disciplined approach to capital allocation, we
invested $2.6 billion in development projects, including
high-return iron ore and copper. Longer term, our $624 million
exploration and evaluation expenditure in 2019 adds to our pipeline
of attractive options.
"Our world-class portfolio and strong balance sheet serve us
well in all market conditions, and are particularly valuable in the
current volatile environment. We are closely monitoring the impact
of the Covid-19 virus and are prepared for some short-term impacts,
such as supply-chain issues. Our products are currently reaching
our customers.
"Our resilience and value over volume strategy mean we can
invest in our business and deliver superior returns to shareholders
in the short, medium and long term."
At year end
2019
2018
Change
Net cash generated from operating
activities (US$ millions)
14,912
11,821
26
%
Capital expenditure1 (US$ millions)
5,488
5,430
1
%
Free cash flow2 (US$ millions)
9,158
6,977
31
%
Underlying EBITDA3 (US$ millions)
21,197
18,136
17
%
Underlying earnings3 (US$ millions)
10,373
8,808
18
%
Net earnings (US$ millions)
8,010
13,638
(41
)%
Underlying earnings3 per share (US
cents)
636.3
512.3
24
%
Ordinary dividend per share (US cents)
382.0
307.0
24
%
Total dividend per share (US cents)
443.0
550.0
(19
)%
Net (debt)/cash4 (US$ millions)
(3,651)
255
Return on capital employed (ROCE)6
24
%
19
%
Our financial results are prepared in accordance with
International Financial Reporting Standards (IFRS).
- Strong safety performance in 2019, with no fatalities and a
slightly improved all injury frequency rate, coming from a strong
base. Continued improvement in prevention of catastrophic events
through a step-change in process safety management.
- $14.9 billion operating cash flow was 26% higher than 2018 and
$9.2 billion free cash flow2 was 31% higher than 2018. Both are
presented after $0.9 billion tax paid in 2019 relating to the 2018
coking coal disposals.
- $5.5 billion capital expenditure1 was consistent with 2018. In
late 2019, we announced the approval of two further investments, at
Greater Tom Price (iron ore, $0.8 billion) and Kennecott (copper,
$1.5 billion).
- $21.2 billion underlying EBITDA3 was 17% above 2018, primarily
driven by higher iron ore prices, with an underlying EBITDA margin7
of 47%.
- $10.4 billion underlying earnings were 18% above 2018. Taking
exclusions into account, net earnings of $8.0 billion were 41%
lower than 2018, mainly reflecting $1.7 billion8 of impairments in
2019, primarily the Oyu Tolgoi underground project, consistent with
our 2019 interim results, and the Yarwun alumina refinery. This
compared with $4.0 billion of gains on disposals in 2018.
- Strong balance sheet with net debt4 of $3.7 billion, a rise of
$3.9 billion, mainly reflected $11.9 billion of cash returns to
shareholders in 2019 through dividends and share buy-backs, and a
$1.2 billion non-cash increase from the implementation of IFRS 16
"Leases", partly offset by free cash flow of $9.2 billion.
- $7.2 billion full-year dividend, equivalent to 443 US cents per
share and 70% of underlying earnings, includes $3.7 billion record
final ordinary dividend (231 US cents per share) declared
today.
1 Capital expenditure is presented gross, before taking into
account any cash received from disposals of property, plant and
equipment (PP&E) and excludes capital expenditure for equity
accounted units.
The following financial performance indicators - which are
non-GAAP measures - are those management uses internally to assess
performance. We therefore consider them relevant to readers of this
document and present them here to give more clarity around the
underlying business performance of our operations.
2 Free cash flow is defined as net cash generated from operating
activities less purchase of PP&E, plus sales of PP&E less
lease principal payments, following the adoption of IFRS 16
"Leases" in 2019.
3 Net and underlying earnings relate to profit attributable to
the owners of Rio Tinto. Underlying EBITDA and earnings are defined
on
page 15. Underlying earnings is reconciled to net earnings on
page 10.
4 Net debt / cash is defined and reconciled to the balance sheet
on page 46.
5 Net gearing ratio is defined as net debt divided by the sum of
net debt and total equity at the end of each period.
6 Return on capital employed (ROCE) is defined as underlying
earnings excluding net interest divided by average capital employed
(operating assets before net debt).
7 Underlying EBITDA margin is defined as the Group's underlying
EBITDA divided by Product Group total revenues per the financial
information by business unit on page 13. Product Group total
revenues is defined as consolidated sales revenue plus share of
equity accounted unit sales and intra-subsidiary/equity accounted
unit sales.
8 See page 42 for a pre-tax analysis of impairment charge.
The full Rio Tinto 2019 full year results announcement is
available here
This announcement is authorised for release to the market by Rio
Tinto’s Group Company Secretary.
LEI: 213800YOEO5OQ72G2R82
Classification: 3.1 Additional regulated information required to
be disclosed under the laws of a Member State
Category: General
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