Category: Stock Market

It’s a rough earnings season day for the S&P/ASX 200 Index (ASX: XJO) and these three stocks aren’t helping it regain ground.

The ASX 200 is down 0.32% at 7,291.1 points at the time of writing.

But that’s nothing compared to the following companies which are falling as much as 5.8% right now on the release of earnings updates.

Let’s take a closer look at what’s got the market bidding them lower.

3 ASX 200 stocks tumbling on half-year results

First up, stock in Nine Entertainment Co Holdings Ltd (ASX: NEC) is struggling on Thursday after the ASX 200 company posted its first-half earnings. Its stock is down 3.4% right now, trading at $1.99 a share.

The entertainment giant revealed a 5% lift in revenue, increasing to $1.4 billion, but sinking profits. Its net profit after tax (NPAT) dropped 16% to $190 million.  

The company also slashed its interim dividend by 14% to 6 cents per share, fully franked.

That was despite its subscription revenues lifting around 9%, excluding its 60%-owned Domain Holdings Australia Ltd (ASX: DHG).

The real estate-focused business posted a 19% fall in earnings before interest, tax, depreciation, and amortisation (EBITDA), coming in at $49.3 million, amid a weaker property market.

Joining the ASX 200 entertainment company in the red is dairy product producer Bega Cheese Ltd (ASX: BGA). Its share price is falling 5.83% right now to trade at $3.39.

While the company’s statutory revenue lifted 11% last half to $1.67 billion, its earnings before interest and tax (EBIT) more than halved, coming in at $20 million. It declared a 4.5 cent per share fully franked dividend for the period – marking an 18% drop.

The company’s branded segment saw 13% growth reflecting price increases and volume growth while revenue in its bulk dairy leg lifted 2% on the back of high dairy commodity prices, but was limited by lower milk availability.

It expects price and mix initiatives will offset cost inflation on a monthly run basis by the end of this fiscal year, with benefits realised in financial year 2024.

Finally, ASX 200 financials stock Insignia Financial Ltd (ASX: IFL) is plunging 4.76% right now to trade at $3.305 apiece.

The financial services provider posted $94.4 million of underlying NPAT for the first half this morning. That marked a 17.1% fall on that of the pcp.

Its funds under management and administration fell $5.5 billion to $285.1 billion as negative market performance took its toll.

Insignia Financial declared a 10.5 cent per share interim dividend – down from 11.8 cents per share in the pcp. CEO Renato Mota commented:

We continue to progress our integration and simplification priorities, delivering ahead of a three-year timeline and accelerating synergy benefits alongside prudent cost control. Our ongoing commitment to simplification and improved focus across the business has been demonstrated through various milestones.

The post 3 ASX 200 stocks being punished on their results announcements appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 3 reasons I prefer buying ASX shares over an investment property
• Why is the Star Entertainment share price on ice today?
• Own Qantas shares? Here’s how the ASX 200 airline is investing $100 million

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nine Entertainment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) shares, all together, are down 0.3% today.

The benchmark index is under some selling pressure following a 0.3% loss overnight on the Dow Jones Industrial Average Index (DJX: .DJI) and a slightly smaller retrace by the S&P 500 Index (SP: .INX) as investors eye another potential interest rate hike by the US Federal Reserve.

But that’s not stopping these three ASX 200 shares from racing higher today following some strong earnings updates.

Earnings, profits and dividends all higher

Up first, we have logistics solutions provider, Qube Holdings Ltd (ASX: QUB).

The ASX 200 share closed yesterday trading for $2.99. Shares are currently trading for $3.25, up 8.5%. That puts the Qube share price up more than 15% so far in 2023.

Investors are bidding up the share price after the company reported some very strong half-year results for the six months ending 31 December, along with a positive growth outlook for the full year.

The company saw a 23% year on year increase in underlying revenue to $1.50 billion.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 31% to $145 million. And net profits after tax (NPAT) increased by 41% to $125 million.

The Qube board rewarded shareholders with a 3.75 cents per share interim dividend, fully franked. That’s up 25% from the interim dividend paid out in 1H FY22.

Which brings us to…

ASX 200 share leaps 8% on full-year results

Also charging higher today is employee management services provider Smartgroup Corporation Ltd (ASX: SIQ).

Smartgroup shares closed yesterday trading for $5.69. Shares are currently changing hands for $6.14 apiece, up 7.9%. That sees shares up more than 20% so far in 2023.

This comes following the release of the company’s full-year results.

Investors look to be bidding up the ASX 200 share with the report that net profits after tax and amortisation (NPATA) came in at the top end of guidance. Full-year NPATA was $61 million, though that was down 12% from 2021.

Revenue, meanwhile, increased by 1% for the full year to $225 million.

Operating EBITDA came in at $93 million, down 9% year on year, which Smartgroup attributed to continuing car supply constraints and higher operating costs. Its EBITDA margin came in at 42% for the year.

Citing the company’s strong cash flow conversion, the board declared a final fully franked dividend of 15 cents per share and a special dividend of 14 cents per share, also fully franked.

This sees the ASX 200 share paying out a total of 46 cents per share in dividends for 2022, representing a trailing yield of 7.5%.

And finally…

ASX 200 gambling share in the spotlight

The Lottery Corporation Ltd (ASX: TLC) is also setting the bar high today.

The ASX 200 gambling company’s shares closed yesterday trading for $4.86. Shares are currently trading for $5.15, up 5.9%. The Lottery Corporation’s share price is now up more than 14% in 2023.

The ASX 200 share reported its own strong half-year results this morning.

Highlights included revenue of $1.92 billion, up 7.7% from 1H FY22. EBITDA leapt 15.8% to $409 million.

The company also declared its maiden interim dividend of 8 cents per share, along with a special dividend of 1 cents per share, both fully franked.

Lottery Corporation’s separation from Tabcorp Holdings Ltd (ASX: TAH) remains on track.

The post 3 ASX 200 shares flying on strong earnings updates appeared first on The Motley Fool Australia.

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More reading

• 6 asset-rich ASX 200 shares to buy for their takeover potential: expert
• 4 ASX 200 stocks smashing new 52-week highs on Wednesday
• Here are the top 10 ASX 200 shares today
• Here’s why I’d buy this ASX 200 share with conviction if there’s a recession
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Smartgroup. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Investors rarely like to see the directors of an ASX 300 share they own dump out of their own company’s shares.

If directors are being paid to manage the finances of a company, it doesn’t exactly instil confidence when said directors reduce their own financial exposure to the company they are managing. Yet that’s exactly what is happening with Bellevue Gold Ltd (ASX: BGL).

Bellevue Gold is an ASX 300 gold exploration share. Its flagship asset is the eponymous Bellevue Gold Project, located in Western Australia. On Tuesday this week, Bellevue released an ASX announcement that revealed one of its directors has just sold a large tranche of shares.

According to the announcement, the director in question is Steve Parsons. Parsons sold exactly 17 million Bellevue shares on 20 February this month. The average price Parsons received for this parcel of shares was $1.05 each. So this transaction was worth around $17.85 million. Bellevue Gold is currently trading at $1.027 a share at the time of writing, up 1.18% so far today.

This sale reduces Parsons’ shareholdings by approximately 50%. He still owns just over 16.5 million ordinary shares, as well as several million performance rights of varying natures. On top of that, Parsons still owns almost 489,000 additional ordinary shares in a superannuation fund.

Director of ASX 300 share Bellevue Gold sells down his stake

So investors might be worried to hear this. But in an accompanying statement, Bellevue told investors that the sale was a consequence of Parsons moving from a managing director role at the company to a non-executive director role. According to the release, “Mr Parsons remains a top-15 shareholder in Bellevue”.

Bellevue chair Kevin Tomlinson told ASX 300 investors that “Steve’s decision to reduce his shareholding is appropriate given his move to a non-executive position. His holding is now commensurate with his new role”.

Bellevue also noted that “during his six-year tenure, Mr Parsons established his shareholding through a combination of the Company’s incentive schemes and on-market purchases”.

Many directors sell shares for very legitimate reasons, it has to be said. Even if someone manages a company, they have their own wealth diversification to consider. So it’s up to Bellevue investors as to what to make of this move.

The Bellevue Gold share price has been a fairly solid performer of late. This ASX 300 share is up a robust 10.54% over the past 12 months and by more than 320% over the past five years.

The post Guess which ASX 300 director dumped over $17 million worth of his company’s shares this week appeared first on The Motley Fool Australia.

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More reading

• Blackmores share price dives despite 38% dividend boost
• Is the Domino’s share price now at bargain-buy levels?
• Hoping to bag the next Fortescue dividend? You’d better hurry
• Why is Qantas buying back shares instead of paying dividends?
• Why is the Whitehaven share price taking a thumping on Thursday?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Blackmores Ltd (ASX: BKL) share price tumbled 9% in early trading today after the supplements company released its 1H FY23 results.

Despite a 17% profit boost and a 38% higher dividend, investors appear to be displeased with the report.

The Blackmores share price opened at $83.50, down 1.4% on yesterday’s close. The stock fell quickly to an intraday low of $77.05, down 9%. The shares are currently changing hands for $79.94, down 5.7%.

Let’s take a look at what the company reported.

Blackmores share price dives 9% despite profit boost

Blackmores said the company had achieved a “solid first half result compared to [a] very strong prior corresponding period which included COVID-19 surge primarily in the International segment”.

Here are the highlights of 1H FY23 for Blackmores:

• Revenue of $338 million, down 1.6% on the prior corresponding period (pcp) of 1H FY22
• Underlying gross margin declined from 53.9% to 53.3%, largely due to the impact of inflation
• Underlying net profit after tax (NPAT) of $24.4 million, up 17.3%
• Net sales down 1.6% and earnings before interest and taxes (EBIT) down 5.5%. If the impact of COVID-19 in 1H FY22 is excluded, net sales are up 3% and EBIT is up 28.4%
• Underlying earnings per share (EPS) up 17% pcp to 125.4 cents
• Fully franked interim dividend of 87 cents per share, up 38% pcp and payable on 28 March

Blackmores dividend up 38%

The company said its balance sheet remains strong and this has enabled it to increase its payout ratio.

It has increased the payout range from 30% to 60% of statutory NPAT to 40% to 70%.

Statutory NPAT during 1H FY23 was $24.3 million, up 19.6% pcp.

What did management say?

CEO Alastair Symington said:

Blackmores delivered a solid result with continued revenue and earnings growth momentum in its Australia/New Zealand and China segments offset by its International segment which lapped a very strong prior corresponding period (pcp) that primarily included COVID-19 demand surge for immunity products.

Our teams have continued their disciplined focus on execution with improved customer service levels
and continued new product and brand innovation which drove market share and distribution gains across our core geographies.

What’s next?

Symington said the near-term remained “somewhat uncertain” due to the impact of rising inflation and interest rates on consumer spending.

He said:

… we remain focused on executing our strategic and commercial plans and leveraging the Group’s channel and geographic diversity.

Operational expenditure reduced by 6.3% while we remain on track to achieve our target of $55 million
annualised gross cost savings by the end of FY23 with $6 million in savings delivered during the first
half.

Today we have also outlined the next phase of cost savings targeting an initial $34-44 million in further
gross cost savings over FY24 – FY26.

Blackmores share price snapshot

The Blackmores share price is up 9.75% in the year to date compared to a 5.1% bump for the S&P/ASX All Ordinaries Index (ASX: XAO).

Over the past 12 months, Blackmores shares have fallen 13.3% compared to a rise of 0.3% for the All Ords Index.

The post Blackmores share price dives despite 38% dividend boost appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares just upgraded by brokers, one with 50% upside

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Blackmores. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you want to get hold of the next Fortescue Metals Group Ltd (ASX: FMG) dividend, you will have to act fast.

That’s because the mining giant’s shares are scheduled to trade ex-dividend in the coming days.

The Fortescue dividend

Last week, Fortescue released its half-year results. The miner reported a 3.6% decline in revenue to US$7.84 billion. This reflects softer iron ore prices, which offset the company’s record-breaking shipments.

In respect to earnings, Fortescue’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 8.7% to US$4.35 billion and its net profit after tax dropped 4.7% to US$2.37 billion.

Combined with a lower payout ratio, this ultimately led to the Fortescue interim dividend being cut by 12.8%. It will pay an interim dividend of 75 Australian cents per share, down from 86 Australian cents per share a year earlier.

While this dividend cut is disappointing, based on the current Fortescue share price of $22.80, it still provides investors with a generous 3.3% yield.

How to receive it

If you want to give your income a boost with the Fortescue dividend, you will need to own its shares before they trade ex-dividend on 27 February.

Given that this is a Monday, investors would need to be a Fortescue shareholder at the close of play on Friday. After that date, it will be too late and if you buy shares the rights to the dividend payment will remain with the seller.

Fortescue then intends to pay its shareholders this dividend towards the end of next month on 29 March. Alternatively, investors can elect to use its dividend reinvestment plan (DRP).

The latter allows eligible shareholders to reinvest their dividends in ordinary shares. The price that these will be allocated at will be calculated as the average of the daily volume weighted average market price of Fortescue shares during the period of five trading days commencing on 2 March.

The post Hoping to bag the next Fortescue dividend? You’d better hurry appeared first on The Motley Fool Australia.

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More reading

• Fortescue shares: Bull vs. Bear
• Why has the Fortescue share price hit a new 52-week high today?
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Passive income watch: 3 ASX 200 shares that slashed their dividends this week
• Should I buy Fortescue shares following the ASX 200 miner’s latest results?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Qantas Airways Limited (ASX: QAN) share price is in the dumps on Thursday despite the company announcing another massive on-market share buyback. Meanwhile, passive income investors might be disappointed by the lack of dividend from the travel giant.

The S&P/ASX 200 Index (ASX: XJO) airline operator posted a $1.4 billion profit for the first half of financial year 2023 this morning, as The Motley Fool Australia reported earlier.

Right now, the Qantas share price is tumbling 6.03% to trade at $6.08.

Let’s take a closer look at the airline’s newly announced $500 million buyback and when investors might expect a dividend from the stock.

Qantas shares slump on buyback and lack of dividend

Qantas will restart buying its shares on market next month after snapping up $400 million worth of stock last half for an average price of $5.78 apiece.

It comes after investors forked out more than $1 billion to help fund the airline’s recovery in 2020, as CEO Alan Joyce commented today. He added:

[The first half profit] is the recovery our people, our shareholders – and in many respects, our customers – have been waiting for. Because this result isn’t just about a single number. Ultimately, it’s about getting back to our best by reinvesting in the national carrier.

Of course, while passive income investors would likely prefer a cash dividend over a share buyback, both ultimately benefit shareholders. That’s because reducing the number of shares on market bolsters the value of those remaining.

And news of the capital return likely hasn’t surprised eagled-eyed market watchers.

Broker Macquarie previously tipped Qantas to buy back up to $800 million worth of its shares amid a faster-than-expected recovery.

Meanwhile, Goldman Sachs was forecasting the airline to announce another $400 million buyback and declare $90 million of dividends today. It’s still tipping the stock to return to dividend this year.

The broker dubbed today’s result “strong”. It rates Qantas shares a buy with an $8.20 12-month price target – a potential 35% upside.

Today’s tumble hasn’t been enough to see the Qantas share price in the 2023 red. The stock is still up 3% year to date and 14% over the last 12 months.

For comparison, the ASX 200 has lifted 5% this year and 1% since this time last year.

The post Why is Qantas buying back shares instead of paying dividends? appeared first on The Motley Fool Australia.

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More reading

• Qantas share price falls 4% despite huge profits and major share buy-back
• Qantas share price on watch amid $1.4b half-year profit
• Earnings preview: Here are the ASX shares reporting on Thursday
• 5 things to watch on the ASX 200 on Thursday
• Own Qantas shares? Here’s how the ASX 200 airline is investing $100 million

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Well, the S&P/ASX 200 Index (ASX: JO) is falling. Again. So far this Thursday, the ASX 200 has slipped b another 0.14%, bringing the index down to around 7,300 points. If the ASX 200 finishes in the red today, it will be the third straight day of losses for ASX shares. But let’s talk about the Whitehaven Coal Ltd (ASX: WHC) share price.

Whitehaven shares are seemingly taking a thumping today. The ASX 200 coal producer finished up at $7.51 a share yesterday. But Whitehaven shares are currently going for just $7.34 each, down by what looks like a fairly nasty 2.26%: 

Yet other energy shares are enjoying some robust gains today. Take the New Hope Corporation Limited (ASX: NHC) share price. It’s currently up by 1.92% at $5.30. Yancoal Australia Ltd (ASX: YAL) is also up by almost 2%.

So why is Whitehaven missing out on these kinds of gains that other coal shares are enjoying?

Well, there’s a simple and rather pleasing explanation – the Whitehaven share price has just traded ex-dividend.

Whitehaven share price slumps after monster dividend rolls out

Last week, Whitehaven reported its earnings for the six months to 31 December 2022. As we covered at this time, these earnings contained some big numbers.

Whitehaven reported that its revenues for the period surged by 164% to a record $3.81 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) also rose by an even better 319% to $2.65 billion, while net profit after tax (NPAT) rocketed 423% to $1.78 billion.

All this enabled Whitehaven to dial its interim dividend up to 11 cents. The company announced a fully-franked interim dividend of 32 cents per share, a 200% increase on last year’s corresponding payment.

But for any new investors wishing to receive this dividend, the ship has just sailed. Whitehaven traded ex-dividend for this upcoming payment this morning. That means that any shareholders owning Whitehaven shares as of yesterday are eligible to receive this latest payment. But any new investors from today are not.

As such, the value of this dividend has just left the Whitehaven share price, which is why we have seen a big drop in the shares so far today. This is the normal course of events when a company trades ex-dividend.

Eligible investors can now look forward to receiving Whitehaven’s latest dividend next month on 10 March.

At the current Whitehaven share price, this ASX 200 coal share now has a dividend yield of 9.85%.

The post Why is the Whitehaven share price taking a thumping on Thursday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 3 ASX 200 dividend shares to buy now before their dividend payouts
• 3 reasons I prefer buying ASX shares over an investment property
• Why is the Star Entertainment share price on ice today?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Flight Centre Travel Group Ltd (ASX: FLT) shares are edging lower on Thursday.

In afternoon trade, the travel agent’s shares are down a fraction to $18.46.

This follows a lukewarm response to the company’s half-year results release earlier this week.

Should you buy Flight Centre shares following its results?

Firstly, let’s take a step back and look at what the company delivered during the first-half.

Flight Centre reported the tripling of its total transaction value (TTV) to $9.9 billion, a 217% increase in revenue to $1 billion, and a modest $2.4 million underlying loss after tax. The latter was a major improvement on the $188 million loss it recorded a year earlier.

However, as this result was largely pre-released at the end of last month, there wasn’t much that wasn’t already known. This may explain why investors have responded in the way they have.

So, should you buy Flight Centre shares?

A number of analysts appear to be sitting on the fence right now and are suggesting that investors wait for a better entry point.

For example, Morgans has responded to the results release by reiterating its hold rating with an improved price target of $19.11. This implies modest upside of 3.5% for Flight Centre shares from current levels.

However, the broker does concede that there is potential for material upside if the company delivers on its medium term margin guidance. In fact, it has suggested that Flight Centre could be “extremely undervalued” if it does. The broker commented:

We maintain a Hold rating with a new A$19.11 price target. However we note that if FLT achieves its margin targets in FY26, there is material upside to consensus earnings and the stock is extremely undervalued. Given its changing business mix and different margin profile, execution is the key risk.

All in all, Flight Centre could prove to be a great ASX share to hold onto for the long term if you believe management will deliver on its targets.

The post Are Flight Centre shares a buy following the ASX 200 company’s latest results? appeared first on The Motley Fool Australia.

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More reading

• Flight Centre share price tumbles despite losses narrowing
• Flight Centre share price on watch as revenue triples, reaching $1b
• Here are the 10 most shorted ASX shares this week
• Own Flight Centre shares? Here’s what the market expects from its half year results
• Are whales dipping in and out of this ASX 200 travel share?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Star Entertainment Group Ltd (ASX: SGR) share price is being spared after the release of its half-year results.

Still sitting in a trading halt, investors are none the wiser as to whether the market is taking today’s results positively or negatively.

Star share price frozen as tarnishing takes its toll

Here are the highlights of the company’s half-year results:

• Statutory revenue up 76% year on year to $1,013 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 550% to $199.7 million
• Net losses deepened by 1,603% to reach $1,264 million
• Net assets fell 37% to $2,153.4 million
• An $800 million equity raising at $1.20 per share announced today
• Dividends suspended until the long-term target leverage of 2 to 2.5 times is reached and all licenses are returned

The six months ending December 2022 was unquestionably a diabolical stretch of time for the casino operator. Troubled by investigations, license stripping, and fines, Star Entertainment is perhaps lucky to still be standing.

Surprisingly, despite all the rumblings, some of the company’s casinos performed strongly. Revenue from Star’s Gold Coast and Brisbane locations increased by 30% and 9% respectively compared to their pre-pandemic levels. Although, the performance of its Sydney casino was not glowing, with revenue slipping 14% to the pre-COVID comparable.

The company’s staggering $1.3 billion loss is comprised of several significant items. These include nearly a billion dollars in impairment costs to Star’s Sydney property assets and goodwill; $350 million worth of penalties; and ongoing costs tied to its regulatory reviews.

What else happened in the first half?

There was little in the way of good news throughout the back half of 2022.

On 17 October, it was unveiled that the New South Wales gaming regulator — NSW Independent Casino Commission (NICC) — had handed down a $100 million fine.

In addition, NICC suspended the company’s gaming license following unsettling findings from an inquiry. Remarkably, the Star share price rose more than 1% on the news.

Another spanner that was thrown into the works during the half was the New South Wales government’s announced plans to bring reform to casino tax rates. Under the new reform, pokies will garner a top tax rate of 60.67%.

What did management say?

Star group CEO and managing director Robbie Cooke discussed the difficulties and the successes during the half, stating:

We have been pleased with the ongoing strength of trading across our Queensland-based properties while trading at The Star Sydney has been impacted by operational changes associated with the outcome of the Bell Review and increased competition.

Cooke put an emphasis on regaining the trust and confidence of the community moving forward. In doing so, a key focus is to prove its casinos are fit for purpose and to regain licenses.

What’s next?

After entering a trading halt yesterday, Star has now announced capital structure initiatives to shore up the company amid the heightened uncertainty.

The plan is to raise $800 million in total through a $685 million entitlement offer and a $115 million institutional placement. Notably, this capital will be raised at a 21% discount to the current Star share price.

According to the release, the proceeds will be used to repay debt and increase liquidity.

Star Entertainment share price snapshot

Shares in the Australian casino operator have been in a world of pain. Not only over the past year, but across the last five years. The company’s share price was unable to reclaim its pre-pandemic level after initially bouncing back.

The last 12 months have seen the Star share price crumble 56%, with steep falls in December and February.

The post Star Entertainment share price treads water as losses blowout to $1.3 billion appeared first on The Motley Fool Australia.

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More reading

• Why is the Star Entertainment share price on ice today?
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• Star Entertainment share price rebounds 8% on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rio Tinto Ltd (ASX: RIO) share price has come under pressure on Thursday.

In morning trade, the mining giant’s shares dropped 3% to $121.72.

Why is the Rio Tinto share price dropping?

The Rio Tinto share price is falling today following the release of the miner’s full-year results, which fell a touch short of the market’s expectations.

In case you missed it, Rio Tinto posted a 13% decline in revenue to US$55,554 million and a 39% reduction in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to US$26,272 million.

The latter is 1.6% short of the consensus estimate of US$26.7 billion.

Management advised that its top line was impacted by weaker commodity prices, whereas its bottom line was hit by higher energy and raw materials prices on its operations, as well as higher rates of inflation on operating costs and closure liabilities.

This ultimately led to Rio Tinto’s board cutting its fully franked final dividend by 46% to US$2.25 per share, which brought the Rio Tinto dividend to a total of US$4.92 per share in FY 2022. This is a 38% reduction on last year’s payout but was in line with consensus estimates.

Broker reaction

Goldman Sachs was pleased with the result. It notes that its earnings were largely in line with its estimates and its dividend was better than expected. It commented:

RIO reported an in-line 2022 result with underlying EBITDA/NPAT of US$26.3bn/US$13.3bn, -2%/+3% vs. our estimates and slightly below Visible Alpha consensus. Net debt of US$4.2bn was broadly in-line with GSe at US$4bn. Iron ore EBITDA was in-line with GSe, minerals performed strongly, but the aluminium division was below GSe on higher than expected costs (particularly in alumina). The final dividend of US$2.25/sh was above our US$1.97 estimate and cons. The full year div payout of 60% was at the top of the 40-60% policy with RIO stating capital allocation will now focus more on growth and decarb.

In response, the broker has retained its buy rating with a slightly trimmed price target of $131.70.

Elsewhere, over at Morgans, its analysts are little less positive. They note that Rio Tinto’s “H2 earnings slightly trailed expectations” and have retained their hold rating with a reduced price target of $109.00.

While its analysts see positives from its improved operating performance, they have concerns over costs. The broker commented:

In general terms it was a tough half for RIO with the big miner poorly positioned to defend against a difficult operating and cost environment given the ongoing productivity issues across its global business. With that said, greenshoots around an improving operating performance could be emerging in the Pilbara (WA iron ore), where it appears in early 2023 RIO has maintained the strong run rate it finished with in 2022. This builds on management’s assessment that each of its Pilbara assets finished 2022 in better shape than they entered the year, although management did caution against forming positive conclusions so early in the year.

The post Why is the Rio Tinto share price tumbling today? appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the latest Rio Tinto dividend
• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto share price on watch amid FY22 results
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Passive income boost! 2 excellent high yield ASX dividend shares to buy: experts

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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