Rio Tinto declares record dividend as earnings jump 69%, $1bn buyback announced

Mining giant Rio Tinto declared a record full-year dividend on Wednesday as it posted a jump in profit and announced an additional $1bn share buyback.

In the year to the end of December 2017, underlying earnings rose 69% to $8.6bn, driven by the $4.1bn post-tax impact of higher prices, while basic earnings per share increased 91% to 490.4 cents.

Consolidated sales revenues rose by $6.2bn from 2016 to $40bn, mostly due to higher average commodity prices. In addition, the dividend was lifted 71% to 290 cents, which includes a final dividend of 180 cents per share.

Rio also announced an additional share buyback of $1bn, which is due to complete by the end of this year.

Chief executive Jean-Sebastien Jacques said: "Today we have announced a strong set of results with operating cash flow of $13.9bn, a record full year dividend of $5.2bn and an additional $1bn share buy-back. This brings total cash returns to shareholders to $9.7bn declared for 2017.

"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.

"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."

Rio said capital expenditure is expected to remain at around $5.5bn this year and around $6bn in each of 2019 and 2020, while an effective tax rate on underlying earnings of around 30% is expected for 2018.