1 August 2018
Rio Tinto chief executive J-S Jacques said “We have reported another strong set of results with underlying EBITDA of $9.2 billion and operating cash flow of $5.2 billion. In a favourable market environment, our Tier 1 assets and strong operational capability have achieved a 43 per cent EBITDA margin. Inflationary pressures are being experienced across the industry, but we have been able to offset these through our mine-to-market productivity programme.
“As a result, we continue to deliver superior shareholder returns with a record interim dividend of
$2.2 billion and a $1.0 billion top-up to our existing share buy-back programme. In addition, in 2018 we have announced $5.0 billion of divestments. The board has today approved that these disposal proceeds, net of tax, will be returned to our shareholders, with the precise timing and form to be determined.
“We will continue to invest in Tier 1 growth, further strengthen our portfolio and maintain a strong balance sheet in order to deliver superior returns to shareholders in the short, medium and long term.”
First half 2018 highlights
– Interim ordinary dividend announced today of $2.2 billion, equivalent to 127 US cents per share, represents 50 per cent of underlying earnings.
– Additional share buy-back of $1.0 billion in Rio Tinto plc shares announced today, to be completed by the end of February 2019.
– Underlying EBITDA1 of $9.2 billion and margin2 of 43 per cent.
– Generated operating cash flow of $5.2 billion, net of a $1.2 billion payment to the Australian Tax Office pertaining to 2017 profits.
– Increase in capital expenditure to $2.4 billion, with $1.4 billion of investment in growth including the AutoHaulTM, Amrun and Oyu Tolgoi projects.
– Delivered underlying1 and net earnings of $4.4 billion and free cash flow3 of $2.9 billion.
– Ongoing reshaping of the portfolio with binding agreements for $5.0 billion (pre-tax) of divestments announced in 2018 first half. The post-tax proceeds of $4.0 billion will be returned to shareholders.
– In addition, on 12 July 2018, the Group announced the signing of a non-binding Heads of Agreement to sell its interest in Grasberg for $3.5 billion.
|
Six months to 30 June |
2018 |
2017 |
Change |
|
Net cash generated from operating activities (US$ millions) |
5,228 |
6,306 |
-17% |
|
Capital expenditure4 (US$ millions) |
2,363 |
1,758 |
+34% |
|
Free cash flow3 (US$ millions) |
2,883 |
4,627 |
-38% |
|
Underlying EBITDA1 (US$ millions) |
9,198 |
9,042 |
+2% |
|
Underlying earnings1 (US$ millions) |
4,416 |
3,941 |
+12% |
|
Net earnings (US$ millions) |
4,380 |
3,305 |
+33% |
|
Underlying earnings1 per share (US cents) |
253.6 |
219.4 |
+16% |
|
Basic earnings per share (US cents) |
251.6 |
184.0 |
+37% |
|
Ordinary dividend per share (US cents) |
127.0 |
110.0 |
+15% |
|
|
At 30 June 2018 |
At 31 Dec 2017 |
Change |
|
Net debt5 (US$ millions) |
5,229 |
3,845 |
+36% |
|
Net gearing ratio6, 7 |
10% |
7% |
|
The financial results are prepared in accordance with IFRS and are unaudited. Footnotes are set out on page 3.