Business

Rio Tinto Turns To Profit, Revenue Dips, Plans Share Buyback; Cuts Dividend

Rio Tinto Turns To Profit, Revenue Dips, Plans Share Buyback; Cuts Dividend

Higher iron ore prices boosted underlying profit 12% Y/Y to $5.1B in 2016, beating the consensus analyst estimate of $4.75B.

The mining giant led the FTSE 100 today as traders dug into the shares following full-year profits of $4.6 billion (£3.7 billion).

Consolidated sales revenues were $33.8 billion, $1.0 billion lower than past year, primarily due to lower average commodity prices, and lower market premia for aluminium.

Speaking to the media Wednesday, Rio Tinto's chief executive, JS Jacques, said the company was unconcerned by any slowdown in China and expected Beijing to continue to stimulate the economy.

"Today's results show we have kept our commitment to maximise cash and productivity from our world-class assets, delivering $3.6 billion in shareholder returns while maintaining a robust balance sheet".

The earnings before interest, tax, depreciation and amortisation margin improved to 38% from 34% due to productivity improvements.

"All the dials seem to be moving in the right direction at Rio, mainly thanks to the self-help measures implemented by the company", Hargreaves Lansdown analyst Laith Khalaf said. It has generated strong operating cash flow of $8.5 billion and underlying earnings of $5.1 billion.

Tiffany replaces CEO as Lady Gaga ad campaign rolls out
Tiffany & Co is down 2.46% at $78.49 after Frederic Cumenal stepped down as chief executive officer on Sunday, Reuters reports . According to many reports, the company hit a tremendous blow when their sales went below the holiday sales they had anticipated.

Rio stock is up 9 per cent this year and reached an nearly four-year high in late January.

Rio said it will purchase $500 million of United Kingdom -listed shares throughout this year.

In related news, insider Jean-Sébastien Jacques acquired 11 shares of the company's stock in a transaction dated Tuesday, January 17th. The miner last month said it produced 6% more iron ore from its Western Australia mining operations during the year.

A small share buyback took returns to investors to $3 billion.

The company is in a "strong position to deliver superior shareholder returns", he added.

"We believe in the value and quality of the Bunder project and support its future development, and the best way to achieve that is to hand over the assets to the government of Madhya Pradesh", Soirat said. Up to $2.45 billion in disposals have already been announced in 2017.

BP said it expects to reduce capital investment in the business to between $16 billion and $17 billion this year, from $19.5 billion in 2015.


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