Noble's Q2 profit slips 5% on commodities pricing weakness

NOBLE Group dealt a 5 per cent drop in net profit for the second quarter ended June 30 to US$62.61 million, dragged by commodity pricing pressures. Revenue for the quarter saw a 22 per cent slump to US$18.36 billion.

"In particular, we saw a significant drop in profitability of the Mining & Metals segment, following a strong first quarter 2015," Noble said in its management discussion and analysis report.

"Both spot and forward pricing came under sustained pressure with aluminium premiums dropping significantly, and the impact of these absolute, and relative price moves have to be reflected by our mark-to-market accounting," it added.

The group marked a 22 per cent slump in net profit to US$169.23 million for the six months ended June 30, as revenue slipped 16 per cent to US$35 billion. But sales volumes of oil liquids and energy coal jumped 33 per cent and 13 per cent year on year in the first half of this year.

The associate value of Yancoal, which Noble deems to have significant influence over and is recognised as an associate on its balance sheet, has declined from US$825 million upon closing of the merger in 2012 to US$306 million as at June 30 due to the losses incurred by Yancoal and impairments. Noble had acquired its 13.2 per cent stake in Yancoal via a sale of 100 per cent of its shares in Gloucester Coal into Yancoal Australia.

Noble said that Yancoal continues to make good progress in rationalising costs with a major focus on the development of the second phase of the very significant low cost open cut Moolarben resource.

Net fair value gains on commodity contracts and derivative financial instruments fell by US$94 million in the quarter and by US$487 million over the six months to June 30, largely due to contract maturities.