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Singapore stock market and companies daily report (Noble Groups, Wilmar) (August 13, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks End Lower As Job Data Fuel More Economic Worries
Stocks closed lower on Aug 12, continuing a losing streak amid light volume and continued worries over the state of the economy. The Dow Jones Industrial Average ended down 58.9 points to 10,319.95. The blue-chip index is in negative territory for the year, down 1%. Technology, industrials and financials were the worst performing sectors, while telecom, and health-care ended higher. In the day’s economic news, the government said weekly jobless claims rose 2,000 to 484,000 for the week ended Aug 7, marking the highest point since Feb 20. Economists had expected claims would fall 14,000. Gold prices jumped above US$1,217 an ounce. Meanwhile, oil fell near US$76 a barrel, marking a third straight session of sharp losses.

Noble’s 2Q10 Profit Falls 65% On Higher Costs
Noble Group’s earnings for the second quarter tumbled 65% from a year ago after costs rose and as last year’s income was inflated by a revaluation gain. Excluding the one-off gain, net income was still lower than the corresponding period last year, though the drop was less drastic, to US$47m from US$95m. For the first half, Noble saw net profit drop 41% to US$200.9m from US$339m a year earlier. Sales increased 83% to US$24.3b from US$13.3b a year ago. Its energy business made up the bulk of first-half gross profit, bringing in US$271m, while its agriculture segment added US$172m. Metals, minerals and ores contributed US$119m, a significant increase from the US$22m it brought in for 1H09.
Significance: Despite lower earnings achieved, Noble is confident in achieving its target of doubling profitability over the next few years given their promising investments and acquisitions of late.

Wilmar’s 2Q10 Bottomline Declines 15% To US$344m
Wilmar posted an unexpected 15% decline in its 2Q10 net profit, hit by losses on convertible bonds and weaker margins. Wilmar said the 2Q10 earnings was affected by a negative change in valuation of US$41.7m for convertible bonds as its share price slumped. Margins for merchandising and processing of palm oil and related products were lower due to tighter supply of crude palm oil and the uncompetitive pricing of palm oil versus other edible oils, it said in a statement. Wilmar also reported growth in overall sales volume supported by a significant manufacturing presence and distribution network in major consuming markets. Revenue was up 18% to US$6.8b on the back of increased sales volume and higher average selling prices.
Significance: While lower earnings was being reported, the acquisition of Sucrogen is expected to enable Wilmar to maintain its high growth while it also speeds up the development of its 200,000 hectares of land in Indonesia’s Papua, dedicated for sugar plantation.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.