17/02/2021 - 15:49

Rio adds to dividend boom

17/02/2021 - 15:49

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Rio adds to dividend boom
Rio will pay a total dividend of $US5.57 per share, worth a total of $US9.0 billion. Photo: Gabriel Oliveira

Mining giant Rio Tinto has posted a 20 per cent jump in annual underlying earnings and declared a bumper dividend as it reaped the benefits of sustained high iron ore prices.

Underlying earnings for the year to December 2020 rose to $US12.45 billion from $10.37 billion in the prior year, beating analysts' estimates of about $12 billion.

Net earnings were up 22 per cent to $US9.77 billion.

The global miner will pay a total dividend of $US5.57 per share, worth a total of $US9 billion.

This equates to a payout of 72 per cent of underlying earnings.

The total includes a final ordinary dividend of $US3.09 and a special dividend of US93 cents.

Rio's big payout follows a record interim dividend by fellow miner BHP, with Fortescue Metals Group expected to follow suit when it announces its results tomorrow.

Rio’s iron ore business contributed $US11.39 billion to the group’s underlying earnings, dwarfing the contribution from its three other divisions: aluminium, copper and diamonds, and energy and minerals.

The financial results were the first to be unveiled by new chief executive Jakob Stausholm, who took the reins after his predecessor, J-S Jacques, resigned amidst outrage over the destruction of the culturally significant Juukan Gorge rock shelters.

“It’s been a year of extremes,” Mr Stausholm said.

“Our successful response to the COVID-19 pandemic and strong safety performance were overshadowed by the tragic events at the Juukan Gorge, which should never have happened.”

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