Rio Tinto rewards investors as profit rebounds on iron ore rally

(Feb 8): Rio Tinto Group will pay a much higher dividend than expected and buy back US$500 million ($708.8 million) of shares after the world’s second-biggest mining company reported the first gain in annual profit since 2013.

Higher iron ore prices boosted underlying profit to US$5.1 billion in 2016, London-based Rio said on Wednesday. That beat the US$4.75 billion average estimate of analysts compiled by Bloomberg.

The dividend fell 21% to 170 cents a share, reflecting a new policy aligning the payout to earnings. Still, that exceeded the average estimate of 136 cents in the Bloomberg survey and the company’s minimum payout of 110 cents. Rio will purchase UK-listed shares throughout the course of this year.

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