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Rio Tinto to distribute record dividend after 90% rise in FY'17 profit

Rio Tinto said Feb. 7 that it will distribute a record full-year ordinary dividend of US$5.2 billion, or US$2.90 per share, including a final dividend of US$3.2 billion, or US$1.80 per share, on the back of the company's strong showing in 2017.

The mining giant's net earnings for the year rose 90% to US$8.76 billion, or about US$4.87 per share, from a profit of US$4.62 billion, or about US$2.55 per share, in 2016. Underlying EBITDA was up 38% on a yearly basis to US$18.58 billion, while CapEx rose 49% to US$4.48 billion.

The improved performance was driven by higher copper and aluminum prices during the year, combined with a strong operational performance and an added US$400 million in free cash flow through its mine-to-market productivity program. The program is expected to deliver additional free cash flow of US$5.0 billion from 2017 to the end of 2021.

In addition, Rio Tinto completed the sale of its Coal & Allied Industries Ltd. unit to Yanzhou Coal Mining Co. Ltd. subsidiary Yancoal Australia Ltd. for US$2.69 billion, which factored in its US$9.54 billion in its overall free cash flow, up 64% on a yearly basis. CapEx is expected to stay at about US$5.5 billion in 2018 and US$6.0 billion in 2019 and 2020.

The company's operating cash flow increased 64% year over year to US$13.88 billion.

On the back of its improved performance in 2017, Rio Tinto said it will undertake an additional US$1.0 billion share buyback to be completed by the end of 2018.

Net debt as of Dec. 31, 2017, totaled US$3.85 billion, falling from US$9.59 billion at the end of 2016.