Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Rio Tinto leads miners lower as iron ore prices weigh on earnings

Softer interim earnings from Rio Tinto see interim dividend offering slashed.

Graphic displaying Rio Tinto stock ticker Source: Bloomberg

Rio Tinto interim results

Rio Tinto has seen its share price trading lower following relatively soft results for the interim period (H1 2023).

First half (H1) profit for the group fell close to 30% short of that in the prior year’s comparative six month period. In lieu we have seen Rio Tinto dropping its interim dividend offering from $5.61 per ordinary share (including a $1.85 special dividend) previously (H1 2022) to $2.67 per share for the current reporting period.

Salient features of Rio Tinto’s interim results (versus prior year’s interim period) are as follows:

  • Net cash generated from operating activities down 23%
  • Free cash flow down 30%
  • Consolidated sales revenue down 10%
  • Underlying Earnings before Interest Tax Depreciation & Amortisation (EBITDA) down 26%
  • Ordinary dividend per share $2.67, down 29%
  • No special dividend ($1.85 per share in prior year’s comparative period)
  • Return on Capital Employed (ROCE) 34% (50% in prior year’s comparative period)

Comments on Rio Tinto results

Interim results highlight the impact of iron ore prices which averaged more than 30% lower than that realized in the comparative six month period. The price of iron ore has been directly influenced by China, the steelmaking ingredients primary consumer. Stricter emission and pricing controls, combined with a two month hard lock down over the last quarter have been key factors weighing on the underlying price of the base metal. China looking to centralise iron ore purchases provides some further uncertainty for miners of the commodity.

Rio Tinto Plc – technical view

Graphic displaying Rio Tinto share price on 27 July 2022 Source: Bloomberg
Graphic displaying Rio Tinto share price on 27 July 2022 Source: Bloomberg

The share price of Rio Tinto has gapped lower following the release of the group’s interim results. The downside gap shows strong momentum lower in line with the short- to medium-term trends. The short- to medium-term downtrends are evidence by the 20-day simple moving average (SMA) (red Line) trading below the 50-day SMA (green line).

Provided that 4810 remains resistance (and not broken with a close above), a retest of the 4420 support level remains favoured.

The long-term trend is considered sideways as we see the price whipsawing back and forth through the 200-day SMA (blue line). In lieu of this, traders preferring a long bias might hope for a bullish price reversal closer to the 4420 level for entry.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

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.