Rising commodity prices have guided Rio Tinto to a full-year profit of $US4.6 billion ($6.02 billion) in 2016, a massive turnaround from the previous year.
Rio Tinto recovered from a $US866 million loss in 2015 as operating cash flow and underlying earnings reached $US8.5 billion and $US5.1 billion, respectively.
The company will deliver $US3.6 billion to shareholders for the year in the form of a $US1.25 per share final divided and a previously announced 45 US-cent per share interim dividend.
Rio Tinto’s energy and minerals division was a standout in the improved results – earnings were 249 per cent higher than 2015 at $US610 million. The performance of the division was boosted by surging commodity prices, particularly coal.
The company’s iron ore operations also played a key role in the turnaround, with earnings rising by 17 per cent against 2015 to $US4.6 billion. However, its aluminium, and copper and diamonds divisions both lost ground.
Rio Tinto chief executive Jean-Sebastien Jacques said the results showed that the company had kept a commitment to maximise cash and productivity from its assets, delivering $3.6 billion in shareholder returns while maintaining a robust balance sheet.
“At the same time, we strengthened the portfolio and advanced our high-value growth projects as we look to the future,” Jacques said.
“We enter 2017 in good shape. Our team will deliver $US5 billion of extra free cash flow over the next five years from our productivity programme. Our value over volume approach, coupled with a robust balance sheet and world-class assets, places us in a strong position to deliver superior shareholder returns through the cycle.”