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Rio Tinto slides to annual loss, abandons payout policy
[MELBOURNE] Global miner Rio Tinto slumped to a net loss for 2015, hit by a rout in commodities, and scrapped its promise to pay a steady or higher dividend annually due to the tough outlook.
The world No 2 miner held its 2015 full-year dividend steady at US$2.15 a share - although below market forecasts for a higher dividend - at a time when its peers are expected to cut or suspend their payouts to shore up their balance sheets.
Rio reported a net loss of US$866 million, hammered by US$1.8 billion in writedowns. Underlying earnings slumped 51 per cent to US$4.54 billion in 2015 from US$9.31 billion a year earlier, due to weaker iron ore, copper and aluminium prices.
The result was in line with analysts' average forecast of US$4.53 billion.
"In light of the significant deterioration in the macro-economic environment and the resultant market uncertainty, the board believes that it is no longer appropriate to maintain the progressive dividend policy," Rio said.
Miners are under pressure from credit rating agencies to curb spending, including cutting dividends, to help them weather the worst market conditions in nearly two decades.