Rio Tinto says its net profit climbed by 22% to £7.03 billion in fiscal 2020.

Rio Tinto plc (LON: RIO) said on Wednesday that its full-year net profit saw a 22% annualised growth, attributed primarily to an increase in iron-ore prices. On the back of its hawkish performance, the company said it will pay a special dividend for 2020.

Rio Tinto shares jumped less than 1% in premarket trading on Wednesday and gained another 3% in the next hour. The stock is now trading at a per-share price of £64.34 versus a low of £29.68 per share in March 2020 – a good news for value investors.

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Rio Tinto reports £8.96 billion of full-year underlying earnings

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Rio Tinto said that its net profit in the recently concluded financial year printed at £7.03 billion versus the year-ago figure of £5.76 billion. Its bottom line in fiscal 2020, the Anglo-Australian multinational added, included £790 million of impairment charges and £940 million of exchanges losses.

At £8.96 billion, the world’s second-largest miner registered a 20% year over year increase in its underlying earnings. Analysts, on the other hand, had called for a lower £8.45 billion of underlying profit.

In separate news from the United Kingdom, British Petroleum said it was launching its 1st share award scheme to rally its workforce of over 60 thousand employees around Chief Executive Bernard Looney’s plan to switch to renewable energy.

Rio Tinto’s board declared £2.22 per share of final dividend on Wednesday, that translates to £3.34 per share of annual ordinary pay-out. In comparison, experts had forecast £3.45 of total dividend after £3.19 per share that it paid in 2019.

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Rio Tinto announces a special dividend of 66.90 pence per share

The London-based company also announced a special dividend of 66.90 pence per share on Wednesday. Its new CEO, Jakob Stausholm, commented on the financial update and said:

“During 2020, the agility and resilience of the business and our employees, coupled with strong commodity prices, enabled us to deliver underlying EBITDA of £17.19 billion and return on capital employed of 27%.”

In January, Rio Tinto said that its full-year iron ore production in Australia was 2% higher than fiscal 2019. The mining corporation resorted to leadership overhaul in September 2020 after excessive pressure from shareholders.

Rio Tinto performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, the Anglo-Australian miner is valued at £80.23 billion and has a price to earnings ratio of 20.31.

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