Noble’s Third-Quarter Profit Drops 70% on Yancoal Loss

Noble Group Ltd. (NOBL), Asia’s biggest commodity trader by sales, said third-quarter profit slumped 70 percent as it booked a non-cash loss related to its stake in coal miner Yancoal (YAL) Australia Ltd.

Net income was $22.9 million in the three months ended Sept. 30, including a $91.9 million loss arising from Noble’s holding in associates, compared with $75.2 million a year earlier, the Hong Kong-based company said today in a statement. Sales in the quarter advanced 13 percent to $25.6 billion.

Noble, the second-largest shareholder in Yancoal, accounted for its share of the miner’s A$749.4 million ($699 million) loss in the first six months. Stripping out the loss, Noble’s profit was $113 million, the highest since the third quarter of 2010, it said in the statement.

“The third-quarter core profit was the best since 2010 and our cost targets are being met,” Chief Executive Officer Yusuf Alireza said in a separate statement. “We are taking full advantage of the current downturn to add significant offtake and marketing agreements.”

Noble shares gained 1.4 percent to S$1.08 at the close in Singapore before the earnings were released.

Operating income at Noble’s agriculture unit fell 80 percent to $14 million. Its energy unit, which includes coal and power businesses, posted a 55 percent gain in operating income to $339.4 million.

Earnings before interest and taxes at Noble’s metals division fell 22 percent to $20.7 million. The company has expanded its portfolio to include tin, copper, bauxite, alumina, zinc and lead, it said in the statement.,

Yanzhou Coal, China’s fourth-biggest coal producer, bought Gloucester Coal Ltd. last year and merged it with its Australian assets to create Yancoal. Noble, which controlled Gloucester, retained a 13.2 percent stake in Yancoal, according to data compiled by Bloomberg. Yanzhou offered in July to buy the rest of Yancoal with depositary receipts, a plan that Royal Bank of Canada said is contrary to regulatory conditions.

To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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