Noble

Noble: Announced 3Q13 results which sorely missed estimates. Rev at 22.6b, -1% y/y while net profit at US$41.3m, -62% y/y and -67% q/q. Operating margins shrank to 1.4% vs 2.02% y/y which resulted in the dismay bottom-line. Operationally, the Agriculture segment weighed on the group's overall performance, registering a operating loss of US$66.6m vs an operating profit of US$47.3m y/y, as the grp note of seasonal patterns associated with its sugar business. While in its Soybean crushing business an improved performance in China was offset by the lack of beans in Argentina. On the trading side of the business, the Brazilian logistics saw congestion as a result of a strong harvest, which disrupted supply chains. The energy segment showed good results with margins increasing y/y and accounted for almost all of the group’s operating income, as the grp continues to build its origination and distribution capacity. MMO segment was relatively muted, although the grp was successful in divesfying its product portfolio into base metals which could imply that profits may remain poor at least for a few more quarters. In light of the poor performance, investors could expect share price to take a hit, although we note that Noble’s NAV/share at $1.00 could provide some support to share price. Latest ratings as follows: Nomura maintains Buy with $1.32 TP SCB maintains O/p with $1.59 TP CIMB maintains neutral with $1.14 TP HSBC maintains neutral with $1.22 TP Maybank-KE downgrades to Hold from Buy with and cuts TP from $1.53 to $1.17 UOB Kay Hian maintains Sell and cuts TP to $0.92 from $1.17