COMMODITIES supply chain manager Noble Group has come through a turbulent and treacherous first quarter with flying colours.
Wild price swings in commodity markets have been the norm this year, and trading firms can easily go belly up if they fail to watch their risks closely. Yet Noble defied the odds to report record quarterly revenues of US$9.5 billion (S$13 billion).
It also brought in a record first-quarter net profit of US$167.1 million (S$229.9 million), which included a one-off gain of US$47.8 million from the sale of a stake in a firm.
Still, the result far surpassed earnings of US$43.8 million and revenues of US$4.1 billion in the first quarter of last year.
Noble founder and chief executive Richard Elman said yesterday: 'The record results masked a very trying quarter. A quarter in which you might be forgiven for believing that, like a duck, everything around the waterline looks serene and calm, while underneath, the little legs are paddling away like mad.
'Volatility was far in excess of normal...witnessing at times 10 per cent price swings in a single day in some of the markets.'
With waters that treacherous to navigate, it was no wonder he was happy to declare that Noble had 'reported a quarter in which it generated earnings in excess of US$100 million net of everything for the very first time'.
Earnings per share for the quarter rose from 1.81 US cents to 6.41 US cents, while net assets per share rose from 60 US cents to 64 US cents.
Noble also defied the global credit crunch that has been affecting the ability of many firms to raise funds, by lining up US$800 million in additional credit facilities during the quarter.
'No mean feat achieving support when others around us were not so fortunate,' Mr Elman observed.
Noble's units were firing on all cylinders in the three months ended March 31, particularly the energy segment, which accounted for more than half of the firm's sales.
The division's quarterly revenue almost trebled to US$5.06 billion, boosted by a sharp jump in coal shipments.
The metals segment was another big contributor, with quarterly revenues almost doubling to US$1.81 billion.
Even the agricultural division, which historically has quiet first quarters, almost doubled revenues to US$2.15 billion.
As good as the results were, Mr Elman is not shying away from the challenges ahead.
'Are we really happy? You bet! Are we complacent? Not a chance!' he said, noting that its Brazilian mining project was 'progressing very nicely', while its Queensland joint-venture mine had started operations.
'These are just a few of the development projects we have in the pipeline, all of which are intended to position us to grow this company in the coming years,' added Mr Elman.
Noble closed two cents down at $2.54 on a volume of 5.9 million shares yesterday.
