2014 results demonstrate clear delivery against our commitments
Revenues and earnings
- Consolidated sales revenues of $47.7 billion, as a $5.4 billion (pre-tax) decline in pricing was partially offset by $3.0 billion from higher volumes.
- EBITDA margin at 39 per cent, unchanged from 2013, with volume gains and cost improvements offsetting the impact of lower prices.
- Achieved underlying earnings of $9.3 billion, nine per cent lower than 2013 despite the $4.1 billion (post-tax) impact of lower prices.
- Underlying earnings per share were 503.4 US cents.
- Net earnings of $6.5 billion reflect non-cash exchange rate losses of $1.9 billion, a $0.4 billion charge following the repeal of the Minerals Resource Rent Tax (MRRT) and other charges of $0.5 billion. An impairment charge of $1.2 billion mainly related to the Kitimat project as reported at the half year was mostly offset by a reversal of $1.0 billion in the second half of 2014 related to an uplift in carrying value for the Pacific Aluminium business.
Production
- Set production records for iron ore and Hunter Valley thermal coal, and delivered a strong operational performance in bauxite, copper and aluminium.
Cash flow and balance sheet
- Achieved $4.8 billion of sustainable operating cash cost improvements and exploration and evaluation savings since 2012, of which $1.5 billion were in 2014.
- Generated net cash from operating activities of $14.3 billion, including working capital improvements of $1.5 billion principally from lower inventories and lower receivables.
- Reduced capital expenditure by $4.8 billion to $8.2 billion in 2014, reflecting completion of existing major projects and continued capital discipline.
- Decreased net debt by $5.6 billion in 2014 to $12.5 billion at 31 December 2014, with gearing of 19 per cent. This compares with $18.1 billion and 25 per cent gearing at 31 December 2013.
Capital returns
- Increased full year dividend by 12 per cent to 215 US cents per share.
- Proposed capital return of US$2.0 billion comprises a targeted A$500 million (c. US$0.4 billion) off-market share buy-back tender of Rio Tinto Limited shares and the balance of approximately US$1.6 billion for an on-market buy-back of Rio Tinto plc shares.
- These represent a total cash return to shareholders, in respect of 2014, of almost $6.0 billion, an increase of approximately 64 per cent on 2013.
- Post the $2.0 billion share buy-back, the proforma gearing ratio at 31 December 2014 increases to 21 per cent.
2015 guidance
- Retain tight capital discipline with a focus on cash generation and sustainable returns.
Further cash cost improvements of $750 million expected to be realised in 2015.
Capital expenditure is expected to decline to less than $7.0 billion in 2015 and remain at around $7.0 billion in 2016 and 2017.
