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Rio Tinto 2018 Profit Rises; To Pay Special Dividend

Australian mining giant Rio Tinto Plc (RTNTF,RIO,RIO.L, RTPPF) reported that its net earnings for the fiscal year 2018 were $13.6 billion, 56% higher than 2017, reflecting $4.6 billion of gains on disposals of businesses and land. The company announced final dividend of $3.1 billion and special dividend of $4.0 billion.

Rio Tinto chief executive J-S Jacques said "We have once again announced record cash returns to shareholders of $13.5 billion on the back of $18 billion of underlying EBITDA and a Return on Capital Employed of 19%. These strong results reflect the efforts of the team to implement our value-over-volume strategy as we continued to strengthen the portfolio and invest in future growth."

Net profit attributable to the owners of the company for 2018 was $13.64 billion or 787.6 cents per share compared to $8.76 billion or 486.9 cents per share in the previous year.

It reported underlying earnings of $8.8 billion, 2% higher due to a strong contribution from Copper & Diamonds, offsetting lower underlying earnings in other product groups.

Consolidated sales revenue grew to $40.52 billion, from $40.03 billion in 2017. Increased volumes of iron ore and copper, and higher prices for aluminium and copper, offset the impact of lower iron ore prices and its coal divestments.

The board expects total cash returns to shareholders over the longer term to be in a range of 40-60% of underlying earnings in aggregate through the cycle.

The company announced final dividend of $3.1 billion or 180 US cents per share, and special dividend of $4.0 billion or 243 US cents per share. The company will pay the 2018 final dividend and the special dividend on 18 April 2019 to holders of ordinary shares and ADRs on the register at the close of business on 8 March 2019.

In 2019, the company expects Pilbara shipments to be 338 to 350 million tonnes (100% basis), subject to weather and market conditions.

The company expects its share of production in 2019 to be between 56 and 59 million tonnes of bauxite, 8.1 to 8.4 million tonnes of alumina and 3.2 to 3.4 million tonnes of aluminium.

Rio Tinto published its approach to climate change, which shows how the company plans to contribute to and leverage the transition to a low carbon future. The report uses recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) as a framework to assess the potential risks and opportunities of climate change and related policies.

Rio Tinto said it has consistently beaten its climate change goals since the business first set short-term and mediumterm targets in 2008. The company has already reduced emissions intensity by almost 30 per cent from 2008 levels, putting it on track to beat its latest target of reducing emissions intensity by 24 per cent from 2008 levels by 2020.

The company noted that it is working on targets for 2020 and beyond before current targets expire in 2020.

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