Rio Tinto : delivers strong cash flow generation of $3.2 billion and declares interim dividend of 45 US cents per share, equivalent to $0.8 billion
August 03, 2016 at 02:30 am EDT
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Rio Tinto chief executive J-S Jacques said: 'Rio Tinto has generated net cash from operating activities of $3.2 billion and reported underlying earnings of $1.6 billion, against a backdrop of continued volatility and lower commodity prices.
'We focus on delivering value to shareholders. This focus is unrelenting, with further cost reductions achieved in the half and EBITDA margins of 33 per cent. With our strong operating cash flows, tight control over capital expenditure and progress on divestments, the balance sheet remains robust. Having paid the 2015 final dividend of $1.9 billion in April 2016, we reduced net debt during the half to $12.9 billion.
'Our balance sheet strength and Tier 1 assets provide a stable foundation in these uncertain and volatile markets, which is fundamental in a cyclical and capital-intensive industry. We will generate cash at every opportunity, which we will then allocate in a disciplined way to deliver returns to shareholders, while also investing in compelling growth.
'The board, today, has announced an interim dividend of 45 US cents per share, consistent with our commitment to no less than 110 US cents per share for the full year.'
Six months to 30 June
2016
2015
Change
Net cash generated from operating activities (US$ millions)
3,240
4,435
-27%
Underlying earnings (US$ millions)
1,563
2,923
-47%
Net earnings (US$ millions)
1,713
806
+113%
Capital expenditure (US$ millions)
1,318
2,474
-47%
Underlying earnings per share (US cents)
87.0
159.1
-45%
Basic earnings per share (US cents)
95.3
43.8
+118%
Ordinary dividend per share (US cents)
45.0
107.5
-58%
At 30 June
2016
At 31 Dec
2015
Change
Net debt (US$ millions)
12,904
13,783
-6%
Gearing ratio
23%
24%
-1%
The financial results are prepared in accordance with IFRS and are unaudited. To allow production numbers to be compared on a like-for-like basis, production from asset divestments completed in 2015 have been excluded from the Rio Tinto share of production data but assets sold in 2016 remain in the comparative. Underlying earnings is a key financial performance indicator which management uses internally to assess performance. It is presented here to provide greater understanding of the underlying business performance of the Group's operations. Net and underlying earnings relate to profit attributable to the owners of Rio Tinto. Underlying earnings is defined and reconciled to net earnings on page 61.
Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment.
Net debt is defined and reconciled to the balance sheet on page 44.
Gearing ratio is defined as net debt divided by the sum of net debt and total equity at each period end.
These financial performance indicators are those which management use internally to assess performance, and therefore are considered relevant to users of the accounts.
Rio Tinto plc published this content on 03 August 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 03 August 2016 06:30:08 UTC.
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Rio Tinto plc is one of the world's leaders in mining research, prospecting and operating. Net sales break down by family of products as follows:
- iron ore (59%): 283.2 Mt produced in 2022;
- aluminum, alumina and bauxite (24.9%): 54.6 Mt bauxite, 7.5 Mt alumina and 3 Mt aluminum produced;
- copper (5.8%) : 521.1 Kt produced;
- industrial minerals (4.8%): titanium dioxide pigments (1,200 Kt produced), borates (532 Kt produced) and salts (5.7 Mt produced);
- diamonds (1.5%) : 4.7 million carats produced;
- gold (1%) : 235,000 ounces produced;
- other (3%): uranium, silver, zinc and molybdenum.
Net sales are distributed geographically as follows: the United Kingdom (0.3%), Europe (6.5%), China (54.3%), Japan (7.4%), Asia (7.1%), the United States (15.9%), Canada (3.1%), Australia (1.9%) and other (3.5%).