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.

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