Rio Tinto announces full-year ordinary dividend of $6.2 billion (382 US cents per share), including record final ordinary dividend of $3.7 billion (231 US cents per share), resulting in total cash returns of $7.2 billion (443 US cents per share)

LONDON--()--Rio Tinto Chief Executive J-S Jacques said “We have again delivered strong financial results with underlying EBITDA of $21.2 billion, underlying EBITDA margin of 47% and return on capital employed of 24%. This performance allows us to return a record final ordinary dividend of $3.7 billion, resulting in a full-year ordinary dividend of $6.2 billion and total cash returns of $7.2 billion.

In line with our disciplined approach to capital allocation, we invested $2.6 billion in development projects, including high-return iron ore and copper. Longer term, our $624 million exploration and evaluation expenditure in 2019 adds to our pipeline of attractive options.

"Our world-class portfolio and strong balance sheet serve us well in all market conditions, and are particularly valuable in the current volatile environment. We are closely monitoring the impact of the Covid-19 virus and are prepared for some short-term impacts, such as supply-chain issues. Our products are currently reaching our customers.

"Our resilience and value over volume strategy mean we can invest in our business and deliver superior returns to shareholders in the short, medium and long term."

At year end

 

2019

 

2018

 

Change

Net cash generated from operating activities (US$ millions)

 

14,912

 

11,821

 

26

%

Capital expenditure1 (US$ millions)

 

5,488

 

5,430

 

1

%

Free cash flow2 (US$ millions)

 

9,158

 

6,977

 

31

%

Underlying EBITDA3 (US$ millions)

 

21,197

 

18,136

 

17

%

Underlying earnings3 (US$ millions)

 

10,373

 

8,808

 

18

%

Net earnings (US$ millions)

 

8,010

 

13,638

 

(41

)%

Underlying earnings3 per share (US cents)

 

636.3

 

512.3

 

24

%

Ordinary dividend per share (US cents)

 

382.0

 

307.0

 

24

%

Total dividend per share (US cents)

 

443.0

 

550.0

 

(19

)%

Net (debt)/cash4 (US$ millions)

 

(3,651)

 

255

 

 

 

Return on capital employed (ROCE)6

 

24

%

 

19

%

 

 

Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS).

  • Strong safety performance in 2019, with no fatalities and a slightly improved all injury frequency rate, coming from a strong base. Continued improvement in prevention of catastrophic events through a step-change in process safety management.
  • $14.9 billion operating cash flow was 26% higher than 2018 and $9.2 billion free cash flow2 was 31% higher than 2018. Both are presented after $0.9 billion tax paid in 2019 relating to the 2018 coking coal disposals.
  • $5.5 billion capital expenditure1 was consistent with 2018. In late 2019, we announced the approval of two further investments, at Greater Tom Price (iron ore, $0.8 billion) and Kennecott (copper, $1.5 billion).
  • $21.2 billion underlying EBITDA3 was 17% above 2018, primarily driven by higher iron ore prices, with an underlying EBITDA margin7 of 47%.
  • $10.4 billion underlying earnings were 18% above 2018. Taking exclusions into account, net earnings of $8.0 billion were 41% lower than 2018, mainly reflecting $1.7 billion8 of impairments in 2019, primarily the Oyu Tolgoi underground project, consistent with our 2019 interim results, and the Yarwun alumina refinery. This compared with $4.0 billion of gains on disposals in 2018.
  • Strong balance sheet with net debt4 of $3.7 billion, a rise of $3.9 billion, mainly reflected $11.9 billion of cash returns to shareholders in 2019 through dividends and share buy-backs, and a $1.2 billion non-cash increase from the implementation of IFRS 16 "Leases", partly offset by free cash flow of $9.2 billion.
  • $7.2 billion full-year dividend, equivalent to 443 US cents per share and 70% of underlying earnings, includes $3.7 billion record final ordinary dividend (231 US cents per share) declared today.

1 Capital expenditure is presented gross, before taking into account any cash received from disposals of property, plant and equipment (PP&E) and excludes capital expenditure for equity accounted units.

The following financial performance indicators - which are non-GAAP measures - are those management uses internally to assess performance. We therefore consider them relevant to readers of this document and present them here to give more clarity around the underlying business performance of our operations.

2 Free cash flow is defined as net cash generated from operating activities less purchase of PP&E, plus sales of PP&E less lease principal payments, following the adoption of IFRS 16 "Leases" in 2019.

3 Net and underlying earnings relate to profit attributable to the owners of Rio Tinto. Underlying EBITDA and earnings are defined on

page 15. Underlying earnings is reconciled to net earnings on page 10.

4 Net debt / cash is defined and reconciled to the balance sheet on page 46.

5 Net gearing ratio is defined as net debt divided by the sum of net debt and total equity at the end of each period.

6 Return on capital employed (ROCE) is defined as underlying earnings excluding net interest divided by average capital employed (operating assets before net debt).

7 Underlying EBITDA margin is defined as the Group's underlying EBITDA divided by Product Group total revenues per the financial information by business unit on page 13. Product Group total revenues is defined as consolidated sales revenue plus share of equity accounted unit sales and intra-subsidiary/equity accounted unit sales.

8 See page 42 for a pre-tax analysis of impairment charge.

The full Rio Tinto 2019 full year results announcement is available here

This announcement is authorised for release to the market by Rio Tinto’s Group Company Secretary.

LEI: 213800YOEO5OQ72G2R82

Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State

Category: General

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Investor Relations, United Kingdom
Menno Sanderse
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David Ovington
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M +44 7920 010 978

Investor Relations, Australia
Natalie Worley
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M +61 409 210 462

Rio Tinto plc
6 St James’s Square

London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England
No. 719885

Rio Tinto Limited
Level 7, 360 Collins Street

Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404

Contacts

media.enquiries@riotinto.com
riotinto.com
Follow @RioTinto on Twitter

Media Relations, United Kingdom
Illtud Harri
M +44 7920 503 600

David Outhwaite
T +44 20 7781 1623
M +44 7787 597 493

Media Relations, Americas
Matthew Klar
T +1 514 608 4429

Media Relations, Asia
Grant Donald
T +65 6679 9290
M +65 9722 6028

Media Relations, Australia
Jonathan Rose
T +61 3 9283 3088
M +61 447 028 913

Matt Chambers
T +61 3 9283 3087
M +61 433 525 739

Jesse Riseborough
T +61 8 6211 6013
M +61 436 653 412

Investor Relations, United Kingdom
Menno Sanderse
T: +44 20 7781 1517
M: +44 7825 195 178

David Ovington
T +44 20 7781 2051
M +44 7920 010 978

Investor Relations, Australia
Natalie Worley
T +61 3 9283 3063
M +61 409 210 462

Rio Tinto plc
6 St James’s Square

London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England
No. 719885

Rio Tinto Limited
Level 7, 360 Collins Street

Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404