Rio Tinto Limited (ASX: RIO) has announced that it will implement an Indigenous Advisory Group (IAG) in an attempt to avoid the destruction of culturally significant landscapes. This decision comes after the controversy surrounding the demolition of Juukan Gorge in Western Australia.

The caves, which were at least 46,000 years old, were blown up by the mining giant last year. Consequently, Rio’s actions caused uproar in the Indigenous community, the media, society at large, and with investors. The CEO, along with 2 senior executives, resigned almost immediately afterwards. In addition, the chair of the company resigned earlier this month.

Let’s take a closer look at the steps Rio Tinto is taking to greater respect Indigenous culture.

Rio Tinto’s cultural heritage seminars

Yesterday, Rio held a series of online seminars for investors on the steps it would be taking after the Juukan Gorge disaster.

The IAG will advise the company, including at a board level, of Indigenous culture and issues within Australia. The group was formed after extensive consultations with the Australian Indigenous community to achieve “more diversity and breadth of views…in decision making,” according to a statement.

The group will consist of 5-8 members. The company hopes with the group it can regain trust both within and outside local Indigenous communities. Importantly, communities such as the Kurrama and Binigura peoples of the Pilbara region.

Management commentary

Regarding the decision, Rio Tinto CEO Jakob Stausholm said:

We have reflected a great deal as a company and leadership team over recent months – listening, learning and responding by taking actions to better manage Traditional Owner partnerships and cultural heritage aspects of our business

He added:

…ultimately, we are guests on their land. And, as guests, we must respect our hosts and work with them to understand their priorities and concerns and minimise our impacts.

Furthermore, Rio Tinto will report on its actions and progress in this space annually. It expects to release its first report in the first quarter of FY22.

Native Title and the mining industry

Despite the understandable uproar caused by Rio Tinto’s destruction of Juukan Gorge caves, its actions were, in fact, legal.

According to the Australian Broadcasting Corporation (ABC) the site was approved for removal in 2013 under Section 18 of the WA Aboriginal Heritage Act (1972).

Under Section 18 of the Act, the Minister for Planning, Lands, and Heritage can give consent to a mining corporation to destroy significant Aboriginal sites.

A federal government review of the incident recommended WA place a moratorium of Section 18 approvals under the Act. The Premier, Mark McGowan, refused to do so.

Currently, the WA government is reviewing the act. It intends to introduce legislation to the parliament in September to make amendments. The Guardian reports the proposed legislation makes some improvements, however, it still “doubles down on the same processes that failed Juukan Gorge traditional owners…”

Rio Tinto share price snapshot

At the time of writing, the Rio Tinto share price was up 0.3% on yesterday’s close – trading at $108.10.

Over the last 12 months, shares in the mining giant have appreciated by 35.85%. Its growth over the last few months has been driven by a rapid rise in the commodity price of iron ore.

Rio Tinto has a market capitalisation of $40 billion.

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Motley Fool contributor Marc Sidarous 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 Bruce Jackson.

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The A2 Milk Company Ltd (ASX: A2M) share price has been out of form once again this week.

This has led to the fresh milk and infant formula company’s shares dropping to a three-year low of $8.31.

Why is the a2 Milk share price at a three-year low?

There are a number of reasons why the a2 Milk share price is now trading at a multi-year low.

This includes heavy insider selling last year, sustained weakness in the daigou channel, and a series of guidance downgrades by management.

The most recent downgrade came last month when a2 Milk released its disappointing half year results.

For the six months ended 31 December, the company recorded a 16% decline in revenue to NZ$677.4 million and a 32.2% decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$178.5 million.

Unfortunately, things are not expected to get much better in the second half after management once again incorrectly estimated the pace of recovery in the daigou and CBEC channels.

It is now forecasting FY 2021 revenue of ~NZ$1.4 billion with an EBITDA margin of 24% to 26% (excluding acquisition costs). This compares to its previously downgraded guidance range of NZ$1.4 billion to NZ$1.55 billion with an EBITDA margin of 26% to 29%.

This will mean a 19.1% year on year decline in revenue and a 26.7% decline in EBITDA, based on the low end of its guidance range.

What else is weighing on its shares?

Also weighing on the a2 Milk share price has been the reaction to its results and outlook from brokers.

After being a market darling for years, brokers have become increasingly mixed on its prospects.

This is particularly the case over at Citi. This week the broker retained its sell rating and $7.15 price target on the company’s shares.

As well as difficulties in the daigou channel, the broker has concerns over increasing competition in the China market from domestic producers.

So, although the a2 Milk share price is trading at a multi-year low, Citi appears to believe it could still fall a further 14% from here.

More reading

• A2 Milk (ASX:A2M) shares and one other slapped with sell ratings
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• Which ASX 200 shares haven’t recovered from the COVID-19 crash?
• Why the A2 Milk (ASX:A2M) share price is under pressure in 2021
• A2 Milk (ASX:A2M) share price tumbles on NZ recession fears

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Euro Manganese Inc CDI (ASX: EMN) share price has been volatile so far this week. Shares in the Canadian group roared back to life on Tuesday, closing 7.8% despite slumping lower in Monday’s trade. 

At the time of writing, the Euro Manganese share price is down 4.35%, trading at 66 cents.

Why is the Euro Manganese share price falling?

Euro Manganese is a Canadian small-cap battery materials company listed on the ASX. The group specialises in the extraction and development of high-grade manganese for use in electric vehicle (EV) batteries. The company is advancing its Chvaletice Manganese Project in the Czech Republic as a key strategic initiative.

Shares in the Canadian mining group slumped lower 4.5% lower on Monday after the company announced a A$30.0 million private placement to the market. Strong institutional participation across the book helped to make the placement oversubscribed.

The proceeds from the $0.60 per CDI offer will help advance its Chvaletice Manganese Project. Euro Manganese intends to produce battery-grade manganese by reprocessing a large deposit of manganese carbonate, contained in waste from historical mining operations at the site.

The Euro Manganese share price crashed lower on Monday after the oversubscribed placement. A strategic investor and environment, sustainability and governance (ESG) focused fund underpinned the capital raise.

However, it hasn’t been all bad news for shareholders. The Euro Manganese share price pared back its losses on Tuesday, surging 7.8% higher to close at $0.69 per share.

Euro Manganese raised the A$30.0 million in funds across two tranches. Euro Manganese maximised its A$25 million under Listing Rule 7.1 in the first tranche. The second tranche of $5.0 million, in excess of Listing Rule 7.1, will be subject to shareholder approval to be sought at a special meeting in May 2021.

Euro Manganese currently has a market capitalisation of $134 million.

Foolish takeaway

The Euro Manganese share price fell 4.5% lower on Monday after its latest capital raise announcement. The volatility continued on Tuesday with shares in the battery materials group surging 7.8% higher to $0.69 per share at yesterday’s close.

Shares in the Canadian battery materials group are trading lower again today following two large share price swings in the last two days.

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Motley Fool contributor Ken Hall 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 Bruce Jackson.

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The Silver Mines Ltd (ASX: SVL) share price is lifting in early trade today after the silver miner announced it submitted a mining lease application for its Bowdens Silver Project. The company says the Bowdens Project is the largest undeveloped silver deposit in Australia and one of the largest on Earth.

At the time of writing, the Silver Mines share price is up 0.89, trading at 22.7 cents.

Let’s look closer at this morning’s news from Silver Mines.

Mining lease application

Today’s announcement is the latest from the company regarding the Bowdens Project, as it looks to be getting closer to breaking ground.

Silver Mines submitted what so far is a successful environmental impact statement in May 2020 and is finalising its response to submissions to the NSW Department of Planning, Industry and Environment.

More about Bowdens Silver Project

The Bowdens Silver Project, located in central New South Wales, is owned completely by Silver Mines.

The company states Bowdens has a mine life of 16.5 years. Over that time, it is expected to produce approximately 66 million ounces of silver, 130,000 tonnes of zinc and 95,000 tonnes of lead.

The proposed development of the Bowdens Silver Project includes an open-cut mine and a new processing plant with a conventional milling circuit and differential flotation.

Smelting of the two concentrates Silver Mines intends to produce at Bowden will be conducted off-site.

The most recent assay results from the project are impressive. They include:

• 34.6 metres at 471g/t silver equivalent (413g/t silver, 1.14% lead, 0.39% zinc) from 96 metres which includes:
• 7 metres at 1090g/t silver equivalent (966g/t silver, 2.86% lead, 0.56% zinc) from 97 metres; and
• 6.1 metres at 874g/t silver equivalent (789g/t silver, 1.67% lead, 0.59% zinc) from 122 metres.

Silver Mines share price snapshot

The Silver Mines share price is having a poor year so far. Despite a few days of decent share price increases, the general trend has been downward. Currently, the company’s shares are down 13.46% year to date. Although, over the last 12 months, its share price has increased by 221.43%.

Silver Mines has a market capitalisation of around $266 million, with approximately 1.1 billion shares outstanding.

More reading

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Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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Premier Investments Limited (ASX: PMV) was one of many ASX retail shares that bounced back strongly from COVID-19. The company announced a record half-year result today, highlighting the resilience of its brick and mortar business and significant growth in online sales.

The Premier Investments share price is currently ~8% higher than its pre-COVID high of $21.30. However, it had a relatively flat year-to-date performance, including a 36 cent dividend paid out on 28 January. 

At the time of writing, the Premier Investments share price is trading at $23.67, up 1.94%. 

Premier Investments share price up as profits soar 

Premier Investments delivered global sales of $784.6 million, up 7.2% on 1H20. This growth was driven by record Peter Alexander sales of $207.7 million, up 43.4%. Its online sales are also gathering momentum, up 61.3% to $156.7 million, representing 20% of global sales. Strong sales were further supported by an uplift in margins, with gross margins up 286 basis points to 65.4%. 

Strong sales backed by improved margins translated to record earnings before interest tax (EBIT) of $237.8 million. This was up 88.5% and a net profit after tax of $188.2 million, up 88.9%. 

Key growth drivers in the first half 

Premier Investments made a critical decision in mid-2020 to invest in increased inventory. In particular, for the key summer period said executive director and Premier Retail CEO, Mr. Mark McInnes. This decision ensured that the business was in-stock to meet pent-up consumer demand. Consequently, this resulted in significantly higher sales and gross margin in 1H21. The business has leveraged the success of increasing inventory into 2H21, maintaining the sale and margin expansion momentum. 

Peter Alexander has emerged as a major revenue contributor to the business. The strategic decision to be in stock in the first half has enabled the brand to deliver increased full-priced sales with much less promotional activity. This has allowed the company to deliver higher margins in 1H21. Premier Investments notes that sales and margin growth momentum has continued into the first seven weeks of 2H21. Additionally, total sales are up 46% on the prior corresponding period. 

Premier Investments’ five iconic apparel brands (Just Jeans, Jay Jays, Jacquie, Portmans, and Dotti) delivered solid like-for-like sales growth of 18.5% in a difficult macro trading environment. The company believes that each of these brands have a strong and distinctive competitive market position and are well-positioned to deliver future growth.

Strong balance sheet with dividends

Premier Investments’ cash on hand has soared to $497.2 million at the end of 1H21, up from $297.5 million in 1H20. Its cash position is significant in proportion to its $3,746 million market capitalisation. The company has also announced an interim dividend of 34 cents per share or an interim yield of approximately ~1.46%. 

More reading

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Alcidion Group Ltd (ASX: ALC) share price has continued its positive run and is pushing higher again on Wednesday.

In morning trade, the healthcare technology company’s shares are up 5% to 29.5 cents.

Why is the Alcidion share price surging higher?

Investors have been buying Alcidion shares this morning after it announced a new contract win.

According to the release, the company has signed a contract with East Lancashire Hospitals NHS Trust for Patientrack and Smartpage. This contract is valued at $2.2 million over five years.

The release explains that the East Lancashire Trust is a large, integrated health care organisation of 8,000 staff, providing acute, secondary and community healthcare for the 530,000 residents of East Lancashire and Blackburn with Darwen.

Patientrack will be used by the Trust’s nurses as they carry out crucial observations, integrating directly with devices used at the bedside to capture patients’ vital signs. This will allow them to automatically calculate a patient’s early warning score.

Whereas Smartpage, which is Alcidion’s smartphone and web-based secure messaging system, will be deployed in parallel and integrated with Patientrack to push alerts to clinical teams for when they need to take action for patient care.

Management commentary

Alcidion’s Managing Director, Kate Quirke, said: “We are delighted to partner with East Lancashire Hospitals NHS Trust to support the delivery of better and safer patient care. Both Patientrack and Smartpage continue to open the door to new customer relationships, supporting the expansion of our presence in the UK.”

East Lancashire Hospitals NHS Trust’s Chief Information Officer, Mark Johnson, spoke very positively about the technology.

He said: “We are driving forward our ambitions to enhance patient care and improve working life for staff through digital technology, both locally and in collaboration with our ICS colleagues across the region. Patientrack, which has delivered impressive results for patient safety in dozens of other NHS hospitals, accompanied by Smartpage, will be an important part of that digital roadmap and the deployment of our local EPR.”

Following today’s gain, the Alcidion share price is now up over 55% since the start of the year.

More reading

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• Why the Alcidion (ASX:ALC) share price is jumping 8% to a 52-week high today
• Alcidion (ASX:ALC) share price hits 52-week high on record sales

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xero Limited (ASX: XRO) share price is edging higher on Wednesday morning.

At the time of writing, the cloud-based business and accounting platform provider’s shares are up 1% to $122.40.

This latest gain means the Xero share price is now up an impressive 25% over the last six months.

Why is the Xero share price edging higher today?

Investors have been buying Xero shares this morning after it announced its second acquisition of the year.

According to the release, the company has acquired e-invoicing infrastructure business Tickstar for up to SEK 150 million (~A$22.9 million).

This comprises an upfront payment of SEK 60 million (A$9.15 million) and earnout payments of up to SEK 90 million (A$13.7 million). The latter will be based on product development and performance milestones. Both will be settled 50% in cash and 50% in Xero shares.

Completion of the transaction is expected in the first quarter of FY 2022 (before 30 June 2021) and remains subject to satisfaction of closing conditions.

The transaction, integration, and operating costs are anticipated to have minimal impact on Xero’s FY 2022 operating earnings.

What is Tickstar?

Tickstar is a Sweden-based e-invoicing infrastructure business that allows organisations such as Xero and its customers to connect to a global e-invoicing network. This enables faster and more secure transactions.

Management notes that the acquisition aligns with Xero’s strategic priority to drive the adoption of cloud accounting around the world.

Xero’s Chief Product Officer, Anna Curzon, commented: “The acquisition of Tickstar is an important step in our strategy to help small businesses digitise more of their workflows and get paid faster using cloud-based technologies. As more governments around the world adopt e-invoicing, Tickstar’s technology will help our customers comply with existing and future legislation and realise the many benefits that e-invoicing brings.”

More reading

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• ASX 200 up 0.4%: Bank shares lower, Xero shares upgraded
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price is under pressure on Wednesday despite the release of a positive announcement.

At the time of writing, the energy producer’s shares are down 2% to $7.02.

What did Santos announce?

This morning Santos provided the market with an update on the Barossa joint venture. This is the company’s offshore gas and light condensate project in the Northern Territory which it owns along with ConocoPhillips and SK E&S Australia. The US$3.6 billion project aims to backfill Darwin LNG.

According to the release, the company has now awarded the project’s major contract for the construction, connection, and operation of the Floating Production, Storage and Offloading vessel (FPSO).

The FPSO services contract has been awarded to international vessel builder and operator BW Offshore (BWO).

Positively, management revealed that through extensive and intensive contract review processes, Santos has achieved a significant financial saving as well as significant energy efficiency improvements. This contract is expected to achieve an overall reduction of approximately US$1 billion in capital expenditure.

Santos’s Managing Director and Chief Executive Officer, Kevin Gallagher, commented: “The decision to proceed with an FPSO services contract maintains a low ongoing operating cost while engineering enhancements have significantly reduced the project’s carbon footprint. This reduction in capital expenditure makes Barossa one of the lowest cost of supply projects in the world for LNG and will provide new supply into a tightening LNG market.”

“At the end of last year, we announced that transport and processing agreements had been finalised for Barossa gas to be tolled through Darwin LNG and we signed a long-term LNG sales agreement with Diamond Gas International, a wholly-owned subsidiary of Japan’s Mitsubishi Corporation.”

Though, it is worth noting that despite the above, a final investment decision on the Barossa project has not been made. However, it is anticipated in the coming weeks, with the first gas targeted for the first half of 2025 if it goes ahead.

Why is the Santos share price tumbling lower?

While this announcement is good news for the company, it hasn’t been enough to stop the Santos share price from tumbling lower today.

This decline has been driven by a significant pullback in oil prices overnight amid demand concerns following lockdowns in Europe.

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Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix Inc (NASDAQ: NFLX) started cracking down on password sharing this month, after years of passively allowing the practice. While it’s always been against Netflix’s terms to share login credentials with people outside your household, Netflix has been hesitant to enforce that rule. 

But now the problem may be too big for Netflix to ignore. Analysts estimate the company’s losing billions in revenue due to password sharing.

It’s almost weird if you don’t share passwords

One-third of all Netflix users say they share their passwords with at least one other person, according to research firm Magid. That number is likely increasing as more streaming services enter the market. The options to “trade” subscriptions — you pay for this, I’ll pay for that — with friends and family are growing.

If each of those one-third of subscribers shared their passwords with just one other person, that represents nearly 68 million freeloaders. If Netflix could get them all to sign up, that would equate to almost $9 billion in revenue based on Netflix’s average revenue per subscriber of $11.02 per month.

Of course, not every password sharer is going to sign up if Netflix manages to cut them off. Citi analyst Jason Bazinet still thinks the opportunity is greater than $6 billion for Netflix. Bloomberg Intelligence is less optimistic, but still sees a substantial benefit. The research firm thinks a crackdown will increase revenue by 10% ($2.5 billion) based on a password sharing rate of 20% to 30% in the United States.

Bank of America analyst Nat Schindler didn’t provide an estimate on revenue, but suggested the crackdown could act as a tailwind for subscriber net additions.

What could go wrong?

There’s a reason Netflix has been hesitant to cut down on password sharing. There’s no clear line to determine legitimate password sharing versus illegitimate sharers. “You have to learn to live with [it] because there’s so much legitimate password sharing,” CEO Reed Hastings said in 2016. “So there’s no bright line, and we’re doing fine as is.”

Being too heavy-handed has the potential to upset and frustrate customers. That’s something to always avoid, but with so many streaming options now available, it’s more important than ever.

What’s more, customers sharing passwords are less likely to churn or hop from one streaming service to the next. Cancelling a subscription that you share with someone requires input from multiple parties. It’s why wireless service companies love family plans and offer substantial discounts for them; they have much lower churn than single lines.

Netflix could see increased churn if password sharing is no longer an option. Some analysts see increased churn as a big risk factor in 2021.

There are billions of dollars in annual revenue on the line, though. If Netflix does this well, it could be a substantial boost to its top line. In its tests, Netflix is asking for users to verify their access to the account they’re using, and if they don’t, it offers a 30-day free trial. Netflix stopped offering free trials to the general public last year.

The best place for Netflix to test the crackdown is in the US and Canada region. Subscriber growth in the region is slowing, and it’s showing signs of having fully saturated the market. It also has a higher average revenue per subscriber. As such, curbing password sharing is likely to have the biggest effect in that region.

In markets where the media company’s still growing quickly, Netflix ought to be more tolerant of password sharing. It exposes more people to Netflix and all it has to offer, and when users are in a position where it makes sense for them to subscribe on their own, they’re more likely to. Former HBO CEO Richard Plepler once called password sharing “a terrific marketing vehicle for the next generation of viewers.” Netflix shouldn’t cut that off before it becomes a substantial opportunity cost.

While Netflix may be losing billions in revenue to password sharing, its best course of action is to try to capture that opportunity a small bit at a time. It can learn best practices and iterate, which is something the company is particularly good at.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Adam Levy owns shares of Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The GrainCorp Ltd (ASX: GNC) share price will be on watch this morning. This comes after the company provided a positive business update to investors. At yesterday’s market close, the grain exporter’s shares finished the day at $4.71.

What did GrainCorp announce?

It will be interesting to see where the GrainCorp share price moves today following this morning’s latest release.

GrainCorp advised that it’s forecasting a $25 million boost in annualised earnings before interest, tax, depreciation and amortization (EBITDA) by 2023-24.

It stated that new operating initiatives have resulted in the business becoming more sustainable. These include expanding bulk materials for export, increasing utilisation at the Numurkah and West Footscray processing facilities, and a shift in the foods product mix to higher-value products.

In further news that could impact the GrainCorp share price, the company has revised its international operating model with the closure of its Hamburg (Germany) office. Planning and supply chain performance efficiencies are also expected to be implemented in the near future.

As a result of the company’s strategic changes, EBITDA is forecast to come in at $240 million by 2023-24.

Management commentary

GrainCorp managing director and CEO Robert Spurway touched on the company’s plans, saying:

Our priority is to increase our return on invested capital by strengthening our core businesses.

We will achieve this by utilising excess port capacity with commodities such as woodchips, fertiliser and cement. We are also continuing to drive operational efficiencies throughout our network, which will enhance our competitiveness and improve our customer offering.

Mr Spurway added:

We have taken numerous steps to reduce variability in our earnings, including network rationalisation, operational improvements, and the establishment of the Crop Production Contract. These have helped to stabilise our earnings profile and provides us with confidence to communicate a through-the-cycle view on future earnings.

GrainCorp share price summary

Over the past 12 months, the GrainCorp share price has increased by more than 50%. The company’s shares are also up 12% year to date and within a whisker of reaching their 52-week high of $4.94.

Based on the current share price, GrainCorp has a market capitalisation of around $1.07 billion, with 288 million shares outstanding.

More reading

• Risk posed to Graincorp (ASX:GNC) share price following ACCC verdict
• Will Aussie agricultural commodity prices see another record-breaking year?

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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