Rio Tinto delivers underlying earnings1 of $9.3 billion and announces a 12 per cent increase in full year dividend

Rio Tinto chief executive Sam Walsh said “Last year, we made a clear commitment to materially increase cash returns to our shareholders. We have delivered this today through a 12 per cent increase in our full year dividend and a proposed $2.0 billion share buy-back. These represent a total cash return to shareholders, in respect of 2014, of almost $6.0 billion.

“Our continued financial and operating discipline enabled us to offset much of the impact of lower commodity prices in 2014. By increasing volumes and reducing costs, we achieved underlying earnings of $9.3 billion and we were able to maintain our EBITDA margin2 at 39 per cent. Free cash flow was assisted by a further reduction in capital expenditure3 and a successful programme to release working capital. As a consequence, we have reduced net debt4 by $5.6 billion to $12.5 billion.

“I would like to thank our 62,000 colleagues for their contribution to these excellent results. Decisive early action throughout the Group delivered the strong balance sheet, which enables us to announce today’s additional material cash return to shareholders.

“With lower commodity prices and uncertain global economic trends, the operating environment remains tough. However, in these conditions Rio Tinto’s qualities and competitive advantages deliver superior value. Our combination of world-class assets, disciplined capital allocation, balance sheet strength, operating and commercial excellence, and a culture of safety and integrity gives me confidence in our ability to continue to generate sustainable returns for our shareholders.”