Rio Tinto has reinforced its focus on delivering superior cash returns for shareholders, as it unveiled in a presentation to investors at a seminar in Sydney, key points to generate approximately $5 billion of additional free cash flow over the next five years.
The presentation demonstrated how Rio Tinto had become a leader in the sector in delivering cash returns to shareholders, by returning 40% of cash generated to shareholders in the first half of 2017. This figure according to the presentation represented about half of all the returns by the top miners.
The company provided a detailed review of how it plans to drive further productivity across its portfolios while maintaining its safety standards.
“Our portfolio of high-quality products has a strategic competitive advantage in commodities that are playing a key role in global urbanisation. Providing customers with the quality products that are in high demand in key markets secures a premium and positions Rio Tinto to continue to outperform its peers,” said the company in a statement.
The company also emphasised its focus on cash generation while reaffirming its successful value-over-volume strategy built on what the company has identified as ‘world class assets, a strong balance sheet, disciplined capital allocation and operational excellence’.
Rio Tinto chief executive Jean-Sebastien Jacques said “All the evidence shows that our value-over-volume strategy is working: delivering superior cash returns for our shareholders, including $8.2 billion announced in 2017. We returned to shareholders 40 cents in every dollar of cash generated by the business in the first half.
“Looking ahead, the $5 billion productivity programme will help drive value over the next five years. With our top-tier assets producing quality low-cost products in high demand, a strong growth pipeline and the best balance sheet in the industry, we have a strong platform for future growth. Our Group target of $1.5 billion of annual additional free cash flow from 2021 will ensure we can continue to lead the pack in delivering superior cash returns to our shareholders.”