Woolies goes ex growth? Woolworths, the country’s premier retailer, revealed its fourth-quarter, first-half sales and profits figures today. Now Woolies has reported its results in the last weeks of the reporting season for a few years now, so it is probably something of a coincidence, but today’s report of a 3% drop in profit and a management shake-up is a bit of a shocker — the worst since the last half of 2011 when earnings dropped 17%. As a result of the weak first-half performance, Woolies management cut its full-year profit growth estimate to around 1.8%, compared to the previous target of a 4% to 7% range. Profit for half-year fell to $1.21 billion after one-offs.

Underlying net profit, before taking into account $148 million of restructuring charges in the Big W general merchandise chain, rose 4.7% to $1.38 billion, and earnings before interest and tax, before one-off costs, rose 4% to $2.12 billion as sales rose 1.9% to $32.68 billion. All that was worse than the performance at rival Coles, announced last week. As a result of the weak performance, the Woolies board has “shot” an executive or two — the head of supermarkets, Tjeerd Jegen, has gone, to be replaced by booze boss Brad Banducci. Dave Chambers, who currently runs its New Zealand supermarkets, has been appointed director of Woolworths’ supermarkets, reporting to Banducci. Interim dividend was lifted to 67 cents a share from 65 cents. Oh, and first-half losses in the under-performing hardware business jumped to $103.2 million from $64.4 million because of rising losses from the Masters hardware start-up that lost $112 million. — Glenn Dyer

Spinning cost cuts, Rio’s way. Rio Tinto revealed a management shake-up this morning, with the company’s structure being “streamlined” and the head of the company’s energy business, Harry Kenyon-Slaney, being flicked after coal was lumped in with copper (great synergy there) and uranium added to the diamonds and minerals group (a slightly better fit). But you had to read the Fairfax Media websites this morning to find that several hundred less-high-flying jobs in iron ore in Western Australia would be following Kenyon-Slaney out the door. In his announcement this morning of the “streamlining”, Rio CEO Sam Walsh didn’t mention the WA job cuts. No wonder the public looks askance at companies large and small talking about “streamlining”, “restructures” and “reviews”. And by the way, the job cuts in the iron ore business come after Rio cut its costs under US$20 a tonne and showed the immense strength of its iron ore mining operations, even at price levels of just over US$62 a tonne and drifting lower. And of course, Rio found a way to run a US$2 billion buyback to quieten noisy shareholders, especially in London. So largesse for shareholders and a pink slip for WA iron ore workers. Great! — Glenn Dyer

All in the Liberal Party Family. The Australian Financial Review revealed this morning that Joe Hockey wants a PR campaign to promote the government’s forthcoming tax-reform ideas (that’s if this current government survives for much longer). The AFR revealed that Treasury wants a public information campaign, including TV commercials, to promote next week’s inter-generational report so that we can take it seriously. Remember this government wasted a reported $8 million promoting the failed higher-education reforms of another frontbencher flop, Education Minister Christopher Pyne. The AFR reported that spinners GRA Cosway, co-chaired by former Liberal minister Helen Coonan and former Labor education minister John Dawkins, were paid $360,000 to prepare the communications effort on tax reform.

“The project is being led by GRA Cosway executives Richard King and Peter Greenwood — both former Coalition ministerial staffers. King was a senior political adviser within Hockey’s Tax Reform Unit,” the AFR reported. All in the Liberal Party family. Tories to the Right, Tories everywhere — except Dawkins, who is coming off a blinder as the first chairman of listed services company Vocation. You all remember Vocation — it’s now struggling to survive after having wasted over $300 million in cash since listing in late 2013 with Dawkins as chairman (he quit in late November), and blown up more than $700 million in sharemarket value. Now does that qualify the firm he co-chairs to flog tax reform to sceptical Australians? Oh, and GRA Cosway is owned by the Clemenger Group, the advertising and marketing business started by Australia Day gongee Peter Clemenger, whose firm has been one of the main advertising agencies for the Liberal party for several decades. — Glenn Dyer

Vale, Vale? Brazil’s mining giant Vale might be the world’s largest iron ore miner, but it is perhaps one of the least-efficient mining companies around the world. It is dominated by the Brazilian government, which in turn is wracked by damaging corruption allegations. The corruption charges have ensnared the other great state-owned resources company, Petrobras, which is now in a financial struggle to survive as low oil prices add to its financial woes. But Vale is a special example — with a reputation for years as a well-run, efficient company, it has been co-opted by the government into supporting dodgy businesses in Brazil, and made ill-advised moves to expand into nickel in Canada as well as fertilisers and coal in Australia.

Overnight, the company reported a net loss in the fourth quarter as iron ore prices fell 50%, the local currency weakened and impairment charges rose. Vale reported a fourth-quarter loss of US$1.85 billion compared with a year-earlier loss of US$6.45 billion. Vale’s sales fell 31% to US$9.07 billion even as it turned out record volumes of commodities. Earnings before interest, taxes, depreciation and amortisation (EBITDA) plunged 66% to US$2.19 billion. Vale wrote off almost US$2 billion in fertiliser, iron ore, Australian coal and nickel assets during the quarter. For all of 2014, Vale’s EBITDA slumped 41% to US$13.35 billion, the lowest figure since the 2009 global recession. Cash flow wasn’t enough to cover Vale’s US$4.2 billion in dividend payments (much of which go to the government) and US$12 billion in capital expenditures, so the company lifted debt and is looking to cut costs and sell assets. That’s a final performance very different to those reported this month by its local rivals BHP Billiton and Rio Tinto. Both those companies reported strong cash flows, resilient earnings (especially in iron ore), falling mining costs and, of course, job cuts. — Glenn Dyer

Coal worth less. Joining the Australian coal write-down club yesterday was Singapore-listed commodities company Noble Group Ltd, which reported its full-year net profit fell 46% from a year ago — thanks in part to a US$200 million impairment against Chinese Australian coal company Yancoal. Noble has a 13% stake in the Australia-listed mining company. It didn’t accept a refinancing share issue run by Yancoal’s Chinese parent late in 2014. Yancoal shares traded at 0.8% of a cent yesterday on the ASX, down from 3 cents a share late last year. Japanese groups Marubeni and Sumitomo have also written millions of dollars off the value of stakes in Australian coal mines in the past three months. Vale wrote down the value of its three Australian coal mines for a second time in a year overnight, this time by US$69 million (A$82 million). Vale had earlier put two of its three Australian coal mines (Isaac Plains and Integra) on care-and-maintenance during 2014, leaving it with just the Carborough Downs coking coal mine operating in Queensland. It did badly last year and Vale’s Australian coal assets lost US$191 million for the year — US$93 million worse than in 2013. — Glenn Dyer

And less of it as well. Glencore, Swiss-based tax-driven wannabe stalker of Rio Tinto in 2014, is now on the back foot as debts rise, revenue falls and it’s threatened with having its credit rating downgraded. Coal prices are falling and losses are mounting. So this morning it made the most dramatic cut of all — it said this morning it would cut 2015 coal output in Australia by 15%, or more than 15 million tonnes of thermal and weak coking coal. The cut comes after the company shut all its Australian mines over Christmas and New Year for three weeks — a move that saw 5 million tonnes of production lost. The cut had been hoped to halt the slide in thermal coal prices, but they have continued falling and are now under US$60 a tonne, at which many companies are losing money. Glencore chief Ivan Glasenberg has said the group was “not prepared to cannibalise our own revenue for the sake of volumes” and it would cut 2015 production by 15 million tonnes to “tailor both volumes and qualities to better match current market demand”. Glencore’s total coal production was almost 97 million tonnes in Australia in 2014 of thermal and coking coal, mainly for export. — Glenn Dyer