Rio Tinto annual net profit up 78% to US$6.53 billion

12th February 2015, Comments 0 comments

Anglo-Australian mining giant Rio Tinto posted Thursday a 78 percent rise in annual net profit to US$6.53 billion while announcing a $2.0 billion share buyback, but underlying earnings fell.

The higher net profit this year was largely due to Rio's 2013 result being hit by large copper and aluminium asset writedowns.

Its underlying profit, a measure the world's second biggest miner generally prefers, was nine percent lower than 2013 at $US9.3 billion, hurt by falling prices for iron ore and copper.

To appease shareholders, the company boosted its dividend by 12 percent to US$1.19 while announcing a round of buybacks that represent a total cash return of US$6.0 billion.

The decision to buy back shares comes six months after Chief Executive Sam Walsh described the company as a "cash machine" following a cost-cutting programme that helped improve profit margins.

"Our continued financial and operating discipline enabled us to offset much of the impact of lower commodity prices in 2014," said Walsh.

"By increasing volumes and reducing costs, we achieved underlying earnings of $9.3 billion."

He added that further belt-tightening helped slash net debt by US$5.6 billion to US$12.5 billion.

"With lower commodity prices and uncertain global economic trends, the operating environment remains tough," he added.

"However, in these conditions Rio Tinto's qualities and competitive advantages deliver superior value."

© 2015 AFP

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