Rio Tinto (RIO) reports better than expected full year earnings

Special dividend announcement was also a welcome bonus to shareholders this morning.

Article updated: 27 February 2019 11:00am Author: Ian Forrest

  • Revenues rise to $40 billion with earnings increasing by 2%.
  • Market reacts positively with share price rising 2% in early trading.
  • Group confirms focus on iron ore production in Australia, with plans to produce 338m - 350m tonnes this year.

Global mining group Rio Tinto (RIO) today reported better than expected full year earnings and a big return to shareholders. Revenues rose by $500 million to $40 billion and earnings were up 2% to $8.8 billion.

The company also announced a special dividend of $4 billion, equating to $2.43 per share. This is thanks to the sale of assets last year which raised $8.6 billion. Rio Tinto also confirmed that they are now very much focused on iron ore production, mainly in Australia, with plans to produce 338m-350m tonnes in 2019.

Market Reacts Positively to News

The market reacted positively to the news, with the share price rising 2% in early trading. The news of the special dividend is not surprising given that it was known that the company had funds available from previous asset sales. Jean-Sébastien Jacques, the Rio Tinto CEO, had also hinted at a return to shareholders in January.

There was mixed news on copper production with a potential major new discovery in Australia offset by a delay at another large site in Mongolia.

Our View on Rio Tinto – Buy

We continue with our buy recommendation for investors looking for a balanced return and willing to accept a medium to higher level of risk.

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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.