To The Moon

Market Overview

The ASX 200 has been moving sideways into late August as earnings season heats up. Banks have tried to prop up the market, but miners, energy, and healthcare have brought plenty of volatility. By August 20, the divergence between sectors has become clear.

Banks have outperformed, lifting the index on several sessions, while materials and energy names have been weighed down by weaker commodity prices and cautious outlooks. Healthcare, once a defensive darling, has seen volatile swings as CSL’s results split investor opinion. The broader market picture reflects resilience in some of the country’s biggest corporates, but also exposes how reliant the ASX remains on iron ore, copper, energy, and financials.

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Earning Highlights

Rio Tinto: Diversification vs Iron Ore Dependence

$Rio Tinto Ltd(RIO.AU)$ ’s half-year numbers highlighted this tension. Revenue inched up to US$26.87 billion, supported by strong performances in aluminium and copper, which grew 20 percent and 41 percent respectively. Yet iron ore, the company’s cornerstone, saw revenue fall 18 percent, pressuring margins and leading to a 5 percent decline in EBITDA and a 16 percent drop in underlying earnings.

The board trimmed the dividend by 16 percent to US$1.48 per share. Management pointed to diversification as proof of resilience, but the numbers underline how sensitive the business remains to the iron ore cycle.

BHP: Copper Gains Prominence

$BHP GROUP LTD(BHP.AU)$ painted a similar picture but with a clearer shift underway. Annual revenue dropped 8 percent to US$51.26 billion and profit sank 26 percent, reflecting lower iron ore and coal prices. The difference was copper. Record production pushed copper’s share of EBITDA from 29 percent to 45 percent, underscoring management’s strategic pivot toward energy transition metals.

While the dividend was cut by 25 percent, BHP still maintained a payout ratio of 60 percent and continues to funnel billions into new copper projects, making the company a bellwether for investors betting on the long-term green economy.

Banks: Profitable but Valuation Risk Remains

The banks offered a different kind of story. $COMMONWEALTH BANK OF AUSTRALIA(CBA.AU)$ delivered a 7 percent rise in statutory profit to A$10.13 billion, broadly in line with expectations. Net interest margins held steady at 2.08 percent, and the dividend rose modestly to A$4.85 per share for the year.

But despite the headline growth, investors punished the stock, sending it down 4 percent on results day, as analysts argued the numbers failed to justify CBA’s premium valuation. It’s a reminder that in banking, valuation risk can outweigh solid fundamentals.

CSL: Transformation in Focus

Healthcare giant $CSL LIMITED(CSL.AU)$ reported a 5 percent rise in revenue to US$15.6 billion and a 17 percent lift in net profit after tax to US$3 billion. Plasma therapies continued to drive growth, and management announced plans to spin off its Seqirus vaccine business next year while restarting a major buyback program.

Yet CSL’s share price has lagged the broader index over the past year, down 12 percent versus the ASX 200’s 12 percent gain. Investors are clearly waiting for proof that these strategic moves will reignite growth.

Woodside: Higher Output, Lower Profit

Energy remains another key swing sector. $WOODSIDE ENERGY GROUP LTD(WDS.AU)$ half-year results showed revenue up 10 percent to US$6.6 billion, but profit fell 24 percent and free cash flow slumped 63 percent as oil and gas prices softened. The company maintained a generous 80 percent payout ratio, even as it cut the interim dividend by 23 percent.

Production hit record highs, particularly at the Sangomar field in Senegal, which has become a bright spot in the portfolio. But the results illustrate the pressure facing Australian oil and gas producers as prices plateau and capital needs rise.

Telstra: Capital Returns vs Growth Concerns

$TELSTRA GROUP LTD(TLS.AU)$ heavyweight Telstra posted a 14 percent increase in EBITDA and a 31 percent jump in reported net profit to A$2.3 billion, driven by steady growth in mobile services. The board raised the dividend by 5.6 percent and announced another A$1 billion buyback, adding to its capital return story.

Broader Market Picture

Taken together, the first weeks of the ASX earnings season reveal several themes. Mining is increasingly a two-speed story: iron ore under pressure while copper gains prominence. Banks continue to print profits but valuation headwinds cap upside. Healthcare companies are pushing through transformation strategies with mixed reception. Energy producers face the reality of lower prices despite higher volumes. And even steady telcos like Telstra are finding that cash returns alone don’t guarantee market enthusiasm.

As the reporting season continues, the key question for investors is how these shifts will play out in the months ahead. Will copper truly replace iron ore as the driver of Australia’s mining giants? Can banks like CBA maintain premium valuations in a more competitive environment? Will CSL’s restructuring restore investor confidence? And for energy names like Woodside, can strong project execution offset weaker commodity prices?

Today‘s Topic

What’s your take on this earnings season so far? Which sector do you think will lead the ASX higher in the second half of 2025? Share your thoughts below.

Disclaimer: This material is for informational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Past performance is not indicative of future results. All investments carry risk, including the possible loss of principal. You should conduct your own research and consult a licensed financial adviser before making any investment decision.