Special dividend announcement was also a welcome bonus to shareholders this morning.
Rio Tinto (RIO) reports better than expected full year earnings
- 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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