Noble's agri segment whipped by back-to-back losses in 2Q
No thanks to weak sugar prices.
According to OSK, Noble's agri segment may still see short term weakness. The agri segment reported a sequential back-to-back loss in 2Q13 after a 1Q13 loss of USD67m, posting an operating income from supply chain of -USD54m.
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This was due to weak sugar prices, which eroded Noble’s margins as it is producing at a level near cost. We see some bright spots in the company’s new oilseed crushing plants in Ukraine, South Africa and Brazil, which are expected to be ready by 4Q13.
However, we believe the full impact of these new plants will only be felt in 2014.