Statutory net profit after tax was $386 million, 13% higher than 2016 and earnings before interest and tax was $635 million, broadly in line with the prior year.
Within the organisation, change has been the enabler that has helped deliver a steady result. Considerable financial benefits continue to flow from the business improvement program that is being embedded as a new way of working across the business. The new, disciplined approach to capital management adopted last year has resulted in a significant reduction in capital expenditure, and decisive action has been taken to strengthen our balance sheet.
Last year we introduced a revised dividend policy that provides greater flexibility to ensure shareholder returns reflect the company’s position and market conditions. The Board has declared a final dividend of 28 cents per ordinary share, bringing the total dividend for the year to 51.5 cents per share. This equates to a 50% of underlying earnings and is an increase of 4% on the prior year.
Safety was by far the most disappointing aspect of the company’s performance, with the fatality of an employee at a customer site in Peru and an accident at our Gyttorp manufacturing site in Sweden that resulted in the death of another employee. Safety is the Board’s paramount concern. Oversight of the management team’s overall approach to safety has been, and will continue to be, a pressing issue. The management team has made strong progress on identifying major hazards across every site, and in verifying key controls, and Board monitoring of this program will always be a priority.
The Board closely reviews progress against the implementation of all elements of the company’s strategy. During the year, the Board visited operations in the Philippines and North America to get a first-hand view of our assets and people. The Board’s Safety, Health, Environment and Community Committee also visited Poland. While it is clear that management is delivering on its commitment to drive cultural change, operational discipline and improved performance, we know there is more work to do and more potential yet to be realised. During the year the Board also reviewed and revised each of the company’s governance policies. These policies not only form an important element of the control framework through which shareholders’ interests are served, they also set the foundation for our culture. For both Board and Management teams, the way we do business is as important as the results we generate.
Strategy and Outlook
Positioning our business to withstand continued external change and restore performance to the levels our stakeholders demand remains a central focus for the Board. While we are alive to the risks of the external environment, we also see opportunity. Our customers are increasingly focused on productivity. Rapid advancement in data analytics, automation and other new technologies are creating enormous potential for improvement in our customers’ value chain, including drill and blast. We have built our reputation by delivering value to customers through our leading technologies and expertise.
In this environment of rapid change and progress, the opportunities for us have perhaps never been greater. While the cultural change and business improvement programs that are making a difference to our performance today remain a principal focus, our continued investment in our people and technology will consolidate our industry leading position and drive future value for our customers and all of our stakeholders well into the future.
On behalf of the Board, I thank our shareholders for your continued support, and our Management team and employees for their contribution.