Noble's agriculture segment suffered US$54m operating loss

And it's to be blamed for the disappointing profits.

According to DBS, Noble’s revenue posted a decent 5% y-o-y and 12% q-o-q growth to US$25.3bn in 2Q13, on higher volume of 57.7mt (+7% y-o-y, +10% q-o-q).

However, core profit disappointed at US$77.1m (excl. US $14.3m loss on supply chain asset), down 47% y-o-y, but up 27% from a low base last quarter.

Here's more from DBS:

The culprit was again the Agriculture segment which reported a US$54m operating loss, a marginal improvement from US$66m in 1Q. This was partially mitigated by stronger performances of the other two segments, Energy and MMO.

Sequential recovery expected for Agriculture. Noble’s sugar mill operations in Brazil are poised to recover significantly as we enter the peak season in 3Q, aided by higher ethanol production and prices.

The recovery in sugar prices plays a critical role. The current price at 16-17 UScents/pound is not sustainable as even the first quartile sugar mills are barely profitable.

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