Noble faces fourth consecutive quarter loss: DBS

2Q12 profit likely declined up to 35% on dismal revenues and margins.

Ahead of 2Q12 earnings results on August 13, DBS predicts earnings for the quarter to have reached US$89-107m or 21-35% lower q-o-q, on the back of seasonally weak Energy and MMO volumes, as well as lower coal and aluminum prices.

Here's more from DBS:

2Q12 core profits to come in at c.US$89-107m. Noble is due to report its 2Q12 results on 13 Aug12. We expect a 21- 35% sequential decline from 1Q12 core profits of US$136m – on account of a seasonal drop in Energy and MMO volumes, softer margins for both segments (following strong 1Q12), as well as lower coal and aluminium prices during the quarter. Agriculture should see slightly higher volumes due to the start of the South American sugar and soybean harvest season.

FY12-14F core profits cut by 0-10%. We have reduced the group’s sugar volumes on weaker-than-expected YTD Brazilian crop, imputed thinner margins for its Chinese soybean crushing business, as well as lowered expected coal and aluminium prices.

Further buy-back may be in the cards. It is still not clear what Noble will do with the c.A$412m of cash it will receive from the Gloucester/Yancoal deal.

Noble’s share price has fallen by 54% since January 2011 and reported three consecutive quarters of y-o-y decline in earnings starting from 3Q11. We see Noble’s 2H12 operating performance recovering y-o-y; and thus expect a re-rating soon.

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