Global miner Rio Tinto ruled out major cash returns to shareholders this year as cost-cutting and reduced capital spending helped it to boost annual profit on Thursday.
Analysts had speculated that Rio could return cash to investors above a proposed 15% rise in dividend payments this year as it revealed a 22% rise in cash flows from operations to $20.1bn.
Chief Executive Sam Walsh said the company would focus on paying down more of its $18.1bn of net debt this year, on top of the $1.1bn that it paid off in 2013.
But he said the board may consider returning cash in future years when its net debt is around $15bn.
Walsh told a news conference: "We want to pay down debt this year and that gives us options going forward relating to shareholder returns and also provides the opportunity for growth. That's what I see 2014 being about, providing a stronger base for 2015."
Analysts have suggested Rio Tinto may need to diversify to reduce dependence on iron ore and copper, particularly if the economies of major metal users like China deteriorate.
Walsh said "the lion's share" of Rio's earnings were from iron ore, but he said the future copper market should improve and aluminium demand should increase as consumers in emerging markets like China buy more household appliances.
He said the company was focused on developing its iron ore and copper businesses and was running others such as diamonds, minerals and aluminium for cash.
Walsh added that Rio was unlikely to make major acquisitions or divestments this year.
"I'm going to invest in only the very best projects. We are diversified but I'm not about to rush into anything," he said.
He added: "We don't have any burning desire to sell assets, particularly if they're not going to meet our valuation, but if someone comes along with a big cheque-book and offers us more than we expected for assets, we'll consider it."
"A great story"
The miner increased underlying earnings in the year to December 31st by a tenth to $10.2bn and increased its dividend by 15% to 192 cents per share. Analysts had expected an annual dividend of $1.81.
Rio has faced pressure to rein in costs after an expansion that led to a $3bn loss in 2012, which sparked the departure of former Chief Executive Tom Albanese.
It slashed $2.3bn from operating cash costs by reducing exploration and evaluation spending by $1bn to $948m last year, topping its $750m target.
It also axed 4,000 jobs across the group, but added staff in its iron ore division to support expansion.
Iron ore, bauxite and thermal coal production hit record levels as iron ore prices stayed buoyant and copper volumes recovered strongly.
It boosted volumes of iron ore, which contributed nearly 90% of its earnings last year, by completing phase one of the expansion of its Pilbara project in August.
Walsh said: "This is a great story and has been well received by investors."
Shares in Rio fell 22.5p or 0.64% to 3,487.5p by 13:35 in London.