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Stocks In Focus (Noble Group, Thai Beverage Public Co, VARD Hldgs) – 15/05/13
Noble’s 1Q13 Earnings Fall 62.5% On Tough Agricultural Business
Noble Group’s earnings for the quarter ended 31 March 2013 plunged 62.5 percent to US$41.3 million while revenue slid 1.1 percent to US$22.6 billion. The weaker performance was due to a loss of US$66.6 million from supply chains at its agricultural business. “The first three months typically represent the low point of the seasonal cycle for Noble’s agricultural business as the majority of the firm’s assets are located in Brazil and the southern part of South America,” said Noble in a note to shareholders. “However, over the decades that we have been building businesses we have come to realise that these transitional periods really are transitional and not permanent,” remarked chief executive officer Yusuf Alireza.
Significance: Analysts are turning bearish on Noble despite the firm’s claim on its improving agriculture business and that it was on track to perform better in the next quarter. In particular, OCBC is of the view that the firm will probably see a recovery towards the end of the third quarter or early fourth quarter as sugar prices are expected to remain low in the next few quarters, and Noble’s iron ore and aluminium businesses were hit by poor demand in China.
ThaiBev’s 1Q13 Earnings Drop 19.7%
Thai Beverage Public Co’s (ThaiBev) earnings for the quarter ended 31 March 2013 dropped 19.7 percent to THB3.5 billion baht due to higher excise duties, lower contribution from beer and non-alcohol beverage as well as a net loss from Fraser and Neave (F&N) operating results. Net profit margin for the quarter fell to 8.8 percent of revenue of THB39.2 billion baht, from 10.6 percent of THB40.6 billion baht a year ago. While the sharpest decline came from the non-alcohol beverage business, the firm’s spirits business managed to record a 5.9 percent increase in net profit to THB4.4 billion baht. On the other hand, its beer business remained in the red at THB178 million baht as higher staff costs continued to compound already weak sales volumes. ThaiBev currently holds a 29 percent stake in F&N.
Significance: ThaiBev stated that it will vote in favour of F&N’s capital reduction. Earlier this week, F&N proposed a $3.28 per share cash payout through a capital reduction exercise to return most of the proceeds from its sale of Asia Pacific Breweries.
VARD’s 1Q13 Profits Down 30.1%
VARD Holdings (VARD), previously known as STX OSV Holdings, released its 1Q13 financial results. Profits for the quarter ended 31 March 2013 fell 30.1 percent to NOK188 million. The dip in profits was mainly due to a 2.3 percent drop in revenue to NOK2.7 billion. This situation should improve by the end of this year when the new shipyard in Brazil goes into operations in June 2013 along with the revised delivery schedule. Meanwhile, the operations in Romania and Norway are now running in full gear while the shipyard in Vietnam continues to see low utilisation, in anticipation of new orders. “We anticipate that the subsea construction vessel segment will continue to drive our growth this year, and we are confident about the group’s prospects for new orders for the rest of 2013, said Roy Reite, chief executive officer and executive director of VARD.
Significance: As at 31 March 2013, VARD’s cash position remains solid, with cash and cash equivalents at NOK2 billion. The firm’s order intake for the quarter was NOK2.8 billion, representing a more than doubling of the NOK1.3 billion order intake for 4Q12, and a close to 20 percent increase from 1Q12.
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