LONDON -- The shares of Rio Tinto (RIO 2.03%) (RIO 2.00%) rallied 2% during early London trade after the miner lifted its annual dividend by 18%, though the shares have since slipped along with the broader market.
Rio declared a total payout of 106.77 pence per share for 2012 compared to 90.47 pence per share for 2011. The dividend lift accompanied full-year results that showed revenue falling $10 billion to $50 billion and underlying earnings declining $6 billion to $9 billion. Rio blamed the lack of progress on lower metal prices, which the firm said wiped $5 billion from its bottom line.
Rio's figures were also blighted by write-offs totaling $14 billion, which were revealed last month and triggered the appointment of a new chief executive. Sam Walsh, Rio's newly installed boss, said this morning:
Today I am setting out how we can build on our strengths and improve this great company. Under my leadership, Rio Tinto will have an unrelenting focus on pursuing greater value for shareholders. To do this we need to run the business as owners not managers and my immediate priority is to build more focus, discipline and accountability throughout the organization.
Walsh added that he was "targeting significant cash proceeds from divestments from non-core businesses in 2013" and "cumulative cash cost savings of more than $5 billion over the next two years."
Based on today's figures, Rio's shares trade on a P/E of 12 and yield 2.8%.
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