Noble's Q3 profit soars to US$153.9m

Singapore

NOBLE Group posted third-quarter net profit of US$153.9 million, almost seven times the US$22.9 million a year ago, thanks to increased trading volumes and a turnaround profit on the group's supply chain assets.

Revenue rose 7 per cent to US$23.3 billion, from US$21.8 billion a year ago, as the largest commodity trader in Asia handled a third more volume.

A profit of US$81.8 million on its supply chain assets, compared to a loss of US$10.3 million last year, helped to boost the bottom line. This included the gain from the sale of a 51 per cent stake of Noble Agri to a consortium led by China's largest grain trader Cofco, which was completed on Sept 30.

For the nine months ended Sept 30, net profit trebled to US$372 million from US$127 million, on the back of a 4 per cent rise in revenue to US$64.8 billion.

Said its CEO Yusuf Alireza: "We are pleased to be able to report an all time record nine month operating profit from supply chains, especially as this has been achieved before the partnership initiatives with Cofco, X2 Resources and Harbour Energy kick in."

Noble has embarked on an asset-light strategy, preferring instead to invest in firms that manage such businesses so that it can focus on trading.

The group said that its initiatives to build out the origination and distribution capabilities of its oil, gas and power divisions have led to a strong performance in its energy platform. In particular, the structural changes in the industry, coupled with the retreat of some players from the market, offer "significant opportunities", it said.

In its smaller metals, minerals and ores business, its alumina and aluminium have grown substantially, while it is also expanding into newer markets such as Mongolia. The weak prices in iron ore, however, led to the firm writing down the value of operating assets in Territory Resources, an Australian iron ore-mining group, and another Australian off-take partner.

The agriculture business that had weighed on Noble last year handled record volumes in the quarter, as soya-bean crushing margins improved in its facilities in both China and South America and newer ones also performed in line with expectations.

Noble is giving a special dividend of US$0.03 a share, to be paid on Dec 5.

The counter closed at S$1.20 on Friday, up one cent, before the announcement of the results.