Poor coal prices drag Noble’s energy division down 10% in 3Q14

Amidst growth in the firm’s agri department.

Noble’s energy division may disappoint in 3Q14 as prices will likely fall from $12.76/ton last year to $11.48/ton GPM this year.

According to a report by Maybank Kim Eng, strong 3Q14 results are mainly caused by a low base last year, which was affected by a USD79m impairment loss at associate, Yancoal Australia.

Maybank KE is looking at a net profit of USD150m, much above 3Q13’s USD23m and 2Q14’s USD66m. Agri should have been a main source of growth but Energy & Metals likely disappointed.

Here’s more from Maybank KE:

This should have benefited from the start of the sugar-crushing season, though to a lesser extent than Wilmar. This is because Noble’s sugar is all processed in Brazil, where we think sugarcane yields have been affected by drought. We also expect Noble’s overall soybean-crushing margins to improve as CBOT soybean prices have been retreating while soybean oil prices have held up. However keep an eye on Noble’s soybean crushing business in Argentina as we suspect the operations there could face under-utilisation problem. Argentina local farmers have been reluctant to sell soybeans as local currency depreciated very fast during the quarter, which could make soybean crushers difficult to obtain soybean from farmers.