Rio Tinto (ASX, LON:RIO), the world’s second largest miner, delivered strong signs of a long-awaited turnaround in the industry by posting its first gain in annual profit since 2013.
The company, which is also the world’s No. 2 iron producer, said it will pay a bigger-than-expected annual dividend of $1.70 per share and announced a $500-million buyback, taking shareholder returns to about 70% of underlying earnings.
An unexpected, but welcome rally in iron ore prices, which surged 81% in 2016, lifted underlying profit 12% to $5.1 billion for the year, significantly higher than the $4.75bn analysts had predicted.
The positive figures were also boosted by Rio’s cost-cutting measures and assets sale, including the $1.3 billion it fetched after offloading its coal and aluminum business.
More to come…
Source: Rio Tinto's results.
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