Rio Tinto share price: what to expect from its half-year results

Unpredictable weather and a weakened iron ore outlook have all put downward pressure on Rio Tinto’s share price in recent times.

When is Rio Tinto’s results date?

Rio Tinto Ltd (ASX: RIO) will release its half-year 2019 results on August 1, after the market close.

What to expect from Rio Tinto's half-year results

With expectations for the mining giant’s half-year results already lowered, it will be interesting to see how investors respond to the official HY2019 release later this week.

As we've reported previously, not only has the company faced challenging conditions across the first-half of 2019, but a weakened outlook for iron ore has dragged the share price of the mining giant down in recent weeks.

In the last month, Rio Tinto's share price has slid a little more than 6%.

Even with this recent volatility, the company’s CEO, Jean-Sébastien Jacques remains upbeat about the mining giant’s long-term prospects, noting that:

‘Whilst we experienced operational and weather issues at our iron ore operations in Australia, pricing and market demand has remained robust.’

Unpredictable events drive the outlook down

Bad weather conditions have played havoc with Rio Tinto’s production targets in the last six months.

Pilbara iron ore shipments came in at 85.4 million tonnes in the second quarter, which was 3% lower than the quarter from the year prior.

Costs have also risen, as ‘unit cost guidance has been revised to $14 - $15 per tonne (previously $13 - $14 per tonne).’

These lower iron ore figures also hurt Rio Tinto’s copper output in the second quarter, which was also down 2%.

The future isn’t all negative

Even though the company's production misses are likely to have been disappointing for investors, Rio Tinto looks to be in a strong financial position for the long-term.

Namely, the company’s focus on performance and productivity, coupled ‘with our value over volume strategy and the disciplined allocation of capital, will continue to deliver superior returns to our shareholders in the short, medium and long term,’ said Rio Tinto’s CEO.

In-line with Rio Tinto’s previous half-year results, investors will likely be keen to see further details of the company’s 2019 interim dividend.

The company has previously noted that over the long-term it is committed to returning between 40% to 60% of underlying earnings to investors.

Rio Tinto Ltd currently has a dividend yield of 4.02%.

Closing remarks

Heading into the HY2019 results release, analysts remain mixed on the company’s outlook.

According to the Wall Street Journal, only five out of the 25 analysts covering the stock rate it as a buy. The current consensus estimate is a hold.

Moreover, just in May, Morgan Stanley analysts, speaking of the iron ore cycle, raised concerns that we are starting to close in on ‘peak levels’. With such concerns beginning to materialise, the mixed consensus for iron ore miners like Rio Tinto may potentially prove justified in the medium-term.

Even with the difficulties outlined above, Rio Tinto Ltd's share price is still up 28% year-to-date.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.