Noble Group 01 (May 08 - May 10)

[Aspellian]

My impression of Noble:
I remembered a friend invested in Noble Group (when <$0.20) because of his feel that management is honest and ambitious.

to share with you an interesting experience:
I remembered during last year when every investors were worried about cash at bank issues - noble price dropped to <$0.60. that one day, Noble sent out an announcment that it has no problem with its cash in bank - TWICE - exact same announcement a day or two apart. my instinct was saying to buy because their management is honest and upfront in addressing its shareholders... should have trusted my gut instinct since i have been following the stock. could have taken a nibble.

[millionairemind]

Aug 13, 2009
Noble doubles Q2 net profit
By Dennis Chan
COMMODITIES supply chain manager Noble Group on Thursday reported a doubling of net profit in the second quarter to US$248.8 million from US$122.5 million.

This was despite a 31 per cent fall in revenue for the three months ended June 30 to US$7.17 billion. This decline was attributed to falling commodity prices.

Profit was boosted by a one-time gain associated with the acquisition of Australian-based Gloucester Coal, the subject of a bitter takeover saga.

Excluding this gain, net profit for the second quarter would have been US$95 million.

Gross profit for the first half year was US$491 million, down 37 per cent. The agricultural segment was the stellar performer, reporting a gross profit of US$224 million, which was a near record level for a six-month period.

In his review, chairman David Eldon said the global financial crisis was an opportunity for the group to demonstrate the effectiveness of its people, systems and approach to mitigating risks.

'Having passed the tests, we believe we have now officially passed from gawky adolescence to fumbling manhood,' he said.

[winston]

Until now, I still dont know the drivers of this company..

When freight rates are down, they get hit.

Their margins are also razor thin meaning that there's no room for mistake.

I was also concerned that their CFO left but things looks ok now..

[iam802]

Do they breakdown the revenue?

How about revenue from trading activities? Wonder what is the contribution?

I believe this also applies to Wilmar, Olam etc.

[kennynah]

i am always very curious...if a company's main business activities do not involve trading, then why should such activities contribute any significant impact to their balance sheet? of cos, FCOs are bounded by duty to best deploy companies' free cash...and they do optimize them thru some form of lower risk trades

[winston]

Not vested. From Phillips:-

NOBLE GROUP LIMITED announced that it handled a record 93 million tons of products in the first half of 2009, an increase of 19% over a year earlier, while generating revenue of US$13.3 billion.

Group gross profit for the first half of 2009 was US$ 491 million with a gross profit margin of 3.7%. Notably, the agricultural segment reported a gross profit of US$ 224 million, a near record level for a six-month period.

[millionairemind]

Noble Group
Outperform
CIMB-GK Research, Aug 14
close: $2.07

Q2 2009 core net profit of US$95 million (down 23 per cent y-o-y) was in line with our expectations, bringing H1 2009 core net profit to US$185 million.

Top line slid 31 per cent y-o-y to US$7.2 billion due to lower commodity prices, with narrower profitability in all segments except agriculture contributing to the y-o-y decline in core net profit. Gross margin slipped to 3.7 per cent from 4.1 per cent a year ago, but was flat q-o-q.

Reported net profit of US$249 million includes a US$154 million one- time revaluation gain from the acquisition of Gloucester Coal. Excluding one- offs, net margin inched up to 1.3 per cent from 1.2 per cent a year ago.

Despite the still-weak economic conditions, Noble reported the second- highest historical tonnage handled at 43.2 million tonnes (up 11.9 per cent y-o-y) due to increased market share, product expansion and new customers.

The strong growth in logistics and metals, minerals and ores (MMO) more than offset the lower volume in agriculture. Gross profit/tonne fell by US$4-14 for the logistics, MMO and energy divisions, but rose by US$3 for the agriculture division.

The ferro alloys segment was the biggest drag on the MMO division, recording a gross loss as selling prices collapsed. While the aluminium and iron ore segments saw record volumes, competition and weak economic conditions shrunk profitability.

Management is optimistic that the recovery in the commodity markets is driven by end-demand, and sees a sustained recovery in the coal and iron ore markets.

With increased market share, product expansion, and new capacity coming online, the company's outlook appears rosy. Maintain 'outperform', target price raised to $2.45, from $1.83.

[winston]

Not vested. From CIMB:-

Noble Group Ltd (S$1.98) - Multiple growth drivers

We brought Noble on a roadshow on 17-18 Aug. Management addressed its growth drivers, balance-sheet strength and outlook.

Key growth drivers have been identified to be:
1) rising production from coal assets;
2) market-share gains;
3) increased vols and value-added processing capabilities from projects coming online
4) expansion in the oil & gas segment.

Management said it did not face liquidity issues even at the height of the credit crunch. It is also optimistic on the outlook for China’s demand, though bearish on the freight market. Our FY09-11 core EPS estimates have been raised by 11-13%.

Accordingly, our target price rises to S$2.75 from S$2.45, still based on 8.4x forward EV/EBITDA (one standard deviation above the mean since Jan 04). We remain bullish on Noble on account of its multiple growth drivers. Maintain Outperform.

[millionairemind]

August 26, 2009, 7.49 am (Singapore time)

Noble Group to borrow US$1.8b in bank loans

SINGAPORE - Noble Group said on Wednesday it has signed a mandate letter with nine financial institutions to borrow US$1.8 billion short-term revolving loans for general corporate purposes.

The arrangement involved the extension of its US$1.2 billion Committed Unsecured Revolving Loan Facility for an additional one and two years and a bid to seek commitments for a new US$600 million 364-day Committed Unsecured Revolving Loan Facility, Noble told the Singapore bourse.

Noble has appointed The Bank of Tokyo-Mitsubishi UFJ, Commerzbank AG, DBS Bank, HSBC, ING Bank, JPMorgan Securities (Asia Pacific), RBS, Societe Generale and Standard Chartered as the Mandated Lead Arrangers, it said. -- REUTERS

[winston]

Not vested. From OCBC:-

Noble Group Ltd: Our preferred pick within the commodities sector

Summary: Evidence of a global economic recovery has enhanced investors’ preference for cyclical stocks such as commodities, sending many stocks higher and leaving few with cheap valuations. In weighing the twin objectives of valuations and outlook, we reiterate Noble Group Ltd (Noble) as our preferred pick within the commodities sector.

Noble has proven its good management and sound execution by emerging in excellent shape from the recent boom-and-bust cycle in the commodities market. We continue to like the stock for its multiple growth drivers, healthy balance sheet, and undemanding valuations. We raise our FY10 earnings forecast and lift our fair value estimate to S$2.50 (from S$2.26). We reiterate our BUY rating on Noble. (Lee Wen Ching)