(Bloomberg) -- Rio Tinto Group met investors' calls for higher returns with a record dividend after reporting annual profit soared to a three-year high amid buoyant commodity prices.
The world's second-biggest miner raised full-year dividend payments by 71 percent, beating estimates and said it would also extend a share buyback program, responding to a request from shareholders including BlackRock Inc. for improved rewards. Total cash returns to investors for 2017 rose to $9.7 billion.
For more details on Rio's earnings, click here
Rio's balance sheet strength and discipline in allocating capital mean it's “in the unique position of being able to invest in high-value growth through the cycle, and consistently deliver superior cash returns to shareholders,” Chief Executive Officer Jean-Sebastien Jacques said Wednesday in a statement. Underlying profit for 2017, the company's best result since 2014, was in line with estimates compiled by Bloomberg.
Raw materials had a second annual gain in 2017 with banks including Goldman Sachs Group Inc. optimistic commodities including iron ore and copper will extend gains this year. Global growth momentum remains healthy, Jacques said.
Even after lifting returns to shareholders, miners will likely have $80 billion in excess cash over the next three years, offering companies the chance to pursue new growth opportunities, according to Macquarie Group Ltd.
The world is short of high-grade, high quality iron ore -- the type supplied by Rio and its key rivals -- Goldman's global head of commodities research Jeff Currie said Wednesday in a Bloomberg Television interview. Iron ore accounted for the largest share of Rio's profits.
To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net.
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net, Edward Johnson at ejohnson28@bloomberg.net, Keith Gosman
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