Rio Tinto swung to an annual loss and scrapped its progressive dividend policy, citing a worsening global economy and a sharp downturn in commodity prices.
Rio Tinto follows major rivals in acting on its dividend to protect profits.
Swiss mining and trading giant Glencore in September scrapped its dividend
and raised US$2.5 billion in a share issue as part of a plan to rein in
net debt. Then, in December, Anglo American said it would suspend
dividend payouts as it outlined plans for a sweeping restructuring that
would include cutting 85,000 jobs—more than half its workforce—and selling mines.
Rio Tinto’s about-turn on its dividend policy is a surprise. Mr. Walsh,
who stepped up as chief executive three years ago in the aftermath of
massive write-downs against Rio Tinto’s operations, in 2014 said the
miner’s so-called progressive dividend was a key commitment that he
aimed to maintain.
On Thursday, he defended the scrapping of that policy as a “prudent” move.
“I don’t think anybody predicted what is happening in the world economy today,” he said.
Read the article online on the @WSJ here here: Rio Tinto Swings to Annual Loss, Alters Dividend Policy
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