22 February 2023
If you are covering Rio Tinto’s latest financial results, please find a comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
“With the era of sky high commodity prices beginning to fade, Rio Tinto’s earnings and dividend are sharply lower year-on-year, although both are in line with consensus expectations. The business has been hit specifically by the second half 2022 fall in price of iron ore.
“However, there are still some positives at play for Rio Tinto. China’s reopening and the demand surge there has meant miners should benefit as infrastructure spend restarts, industrial output increases and property restrictions loosen. Indeed iron ore prices have recovered somewhat as a result of China’s reopening, so it will be crucial to see how that plays out for 2023.
“Meanwhile, for those wary of or clamouring for a potential high-priced deal, the chief executive is not looking at transformative M&A right now. However, Rio Tinto is looking to set up the business for the energy transition as they begin to shift focus to lithium, which along with the recent Turquoise Hill acquisition that significantly increased copper exposure, would be a further step towards a more directly energy transition-oriented portfolio.”
