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A Look at Noble’s 2012 Results

Noble Group (SGX: N21) released its full year results yesterday. The company’s revenues grew by 16% from US$80.73b to US$94.05b. Profit for the year grew by a smaller margin of 9% from US$431.3m to US$471.3m. Fully diluted earnings per share also grew by 9% from US$0.0620 to US$0.0676. The company saw record tonnage of 224 million tonnes for the year.

Noble’s increase in profitability can be largely attributed to a strong performance in its Energy business, contributing 81.3% of the company’s operating income in 2012. The Energy business saw growth of 24% in annual sales from US$51.5b to US$63.8b, supported by a record tonnage of 136.8m tonnes in 2012 – an increase of 13% from 120.8m tonnes in 2011. Operating income for the Energy business also grew 24.6% from US$962.4m to US$1.20b.

Both Noble’s Agriculture and Metals segment saw a yearly decrease in sales and operating income. The Agriculture segment, which consists of the Grains and Oilseeds division among others, saw a drop of 15.7% in sales from US$18.31b to US$15.44b. However, operating income for the division fell 64.6% from US$466.0m to US$164.8m. Management cited a ‘very challenging operating environment’ for the poor results from the Agriculture segment. Asia’s leading agriculture business, Wilmar International (SGX: F34) also saw a 97% decline in full year pre-tax profit for its Oilseeds and Grains business segment.

Despite 2012’s poor results, Noble’s management had a bright outlook on the future of its Grains and Oilseeds division as they commented that “2013 should benefit from a strong crop outlook in our key origination centers in South America while our three new oilseed crushing plants in Brazil, South Africa and Ukraine will ramp up production in 2013 – although meaningful contributions are more likely in 2014.’’

The Metal segment’s revenue grew by 35% from US$10.93b to US$14.75b. Operating income decreased by 25.7% from US$148.3m to US$110.2m largely due to a loss on supply chain assets. Tonnage in different metals had a mixed year as Iron Ore tonnage decreased by 25% while Aluminium’s increased by 18%.

A dividend of US$0.0181 per share for 2012 has been recommended, subject to shareholder’s approval. This is 9.7% higher than 2011’s divided per share of US$0.0165.

In an earlier announcement, Noble Group revealed that it had sold a 53.7% stake in its wholly-owned subsidiary, Noble Plantations Pte Ltd, to Wilmar. Noble Plantations will be involved with palm projects in Papua Indonesia.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Contributor Chong Ser Jing doesn’t own shares in any companies mentioned.