Rio Tinto CEO: We Are Strongly Comitted To Shareholders' Returns

Worlds’ second biggest miner Rio Tinto plc (ADR)RIO came out with better than expected full year earnings earlier today. The full year net profit of the company rose from $ 3.67 billion last year to $6.5 billion this year. The company also slashed its net debt by $12.5 billion and hiked annual dividend by 12p.

Sam Walsh, Rio Tinto CEO, was on CNBC Thursday to discuss the results and the outlook for this year.

“I think, we have surprised the markets,” Walsh said. “Earnings of $9.3 billion, 12 p increase in dividend… a $2 billion buyback and we have achieved that in tough market conditions, through cost reductions, trimming our capital, trimming our working capital and very focussed on taking advantage of our tier-1, low-costs estimates. It’s a good story, it’s a great business.”

Can You Expand And Offer Investors Hope For Another Buyback In This Kind Of Tough Environment?

“We focus very much on strengthening our balance sheet,” Walsh replied. “We have taken $9.5 billion of debt out of the business since its peak in June 2013. That with low debt and low [gearing] ratio of debt to equity of 19p has enabled us dividend, the buyback has increased our [pro forma] debt to equity ratio to 21p which is still very low and in the range we have indicated is our preferred operating range of 20 to 30p.”

“So, […] it does bode well in terms of, of the options that are provides [aboard] to make decisions around this time next year about our shareholder returns , we are strongly committed to shareholder returns.”