Rio Tinto chief executive Sam Walsh said “These strong results reflect the progress we are making to transform our business and demonstrate how we are fulfilling our commitments to improve performance, strengthen the balance sheet and deliver greater value for shareholders. We have achieved underlying earnings of $10.2 billion, exceeded our cost reduction targets and set production records. In turn, this has enhanced our cash flow generation and lowered net debt. The 15 per cent increase in our dividend reflects our confidence in the business and its attractive prospects.”
- Underlying earnings of $10.2 billion were up ten per cent on 2012.
- Operating cash cost improvements of $2.3 billion exceeded the 2013 target of $2.0 billion.
- Exploration and evaluation savings delivered $1 billion, against the 2013 target of $750 million.
- Production records set for iron ore, bauxite and thermal coal and a strong recovery in copper volumes. Iron ore volumes were bolstered by the completion in August of the Pilbara phase one infrastructure expansion to 290 Mt/a, with ramp-up on track to reach nameplate capacity before the end of the first half of 2014.
- Net earnings of $3.7 billion reflect non-cash exchange losses of $2.9 billion and impairments of $3.4 billion, notably the impairment of a previous non-cash accounting uplift on first consolidation of Oyu Tolgoi, a project overrun at Kitimat and the previously announced curtailment of the Gove alumina refinery.
- Cash flows from operations of $20.1 billion were up 22 per cent and capital expenditure was down 26 per cent to $12.9 billion.
- Net debt reduced to $18.1 billion at 31 December 2013, $4.0 billion down on the half year and $1.1 billion down on the previous year end.
- 15 per cent increase in full year dividend to 192 cents per share reflects the sustainable growth of the business.
| Year to 31 December (All amounts are US$ millions unless otherwise stated) |
|
2012 |
|
| Underlying earnings1 |
10,217 |
9,269 |
+10% |
| Net earnings / (loss)1 |
3,665 |
(3,028) |
n/a |
| Cash flows from operations |
20,131 |
16,521 |
+22% |
| Capital expenditure |
12,944 |
17,575 |
-26% |
| Underlying earnings per share – US cents |
553.1 |
501.3 |
+10% |
| Basic earnings / (loss) per share from continuing operations – US cents |
198.4 |
(163.4) |
n/a |
| Ordinary dividends per share – US cents |
192.0 |
167.0 |
+15% |
The financial results are prepared in accordance with IFRS and are unaudited. 1Underlying earnings is the key financial performance indicator which management uses internally to assess performance. It is presented here to provide greater understanding of the underlying business performance of the Group’s operations attributable to the owners of Rio Tinto. Net earnings and underlying earnings relate to profit attributable to owners of Rio Tinto. Underlying earnings is defined and reconciled to net earnings on page 48. Comparative information has been restated to reflect a number of new accounting standards. Please see the note on ‘Accounting policies’ on pages 40 to 45.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore. Activities span the world and are strongly represented in Australia and North America with significant businesses in Asia, Europe, Africa and South America.