THE NEWS WRAP: Rio Tinto reports $US2.99 billion loss for 2012

Mining giant Rio Tinto has reported a $US2.99 billion loss for 2012, with chief executive Sam Walsh admitting the mining giant has demonstrated “poor judgement” in the past.

 

The loss was due to large write-downs in the value of its asset prices, including $US11 billion in aluminium, $US2.9 billion for its Mozambique coal assets and $US460 million for its Argyle diamond mine in Western Australia.

 

Walsh says the company had learnt from its disastrous takeovers of Alcan in 2007 and Riversdale in 2011, which led to the large asset write-downs.

 

The music stops for David Jones

 

David Jones has reported a 1.4% year-on-year fall in sales to $590.1 million for the quarter to January, citing a consumer fixation on discounts and a failure of rate cuts to stimulate consumer spending as key factors.

 

The department store giant has also announced that it is joining JB Hi-Fi in ending deep discounts to consumers, while scrapping low-margin categories, including DVDs, computer games and music, in favour of a larger emphasis on fashion.

 

“The fashion and beauty business is doing very well and is actually in good shape, but we’re dragged down by the home categories, particularly electronics, which would include TVs,” David Jones chief executive Paul Zahra says.

 

Baked beans for Buffett

 

Warren Buffett’s Berkshire Hathaway has announced it is joining Brazilian private equity firm 3G Capital in a $US23 billion takeover of H.J. Heinz.

 

While Buffett’s firm will contribute around $US12 billion to $US13 billion in cash for the takeover, 3G Capital will control the food giant after the takeover.

 

The deal, expected to close in the third quarter subject to shareholder and regulatory approval, will be financed through a combination of cash, rollover of Heinz’s existing debt and new debt financing.

 

Overnight

 

In New York, the S&P500 was 0.112% higher at 1522.04. The Aussie dollar is up to $US103.54 cents.

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