TEXT-S&P:Noble Group rating unaffected by results

(The following statement was released by the rating agency)

Aug 14 - Standard & Poor's Ratings Services said today that its rating on Noble Group Ltd.

(BBB-/Negative/--; cnBBB+/--) is not affected by the company's weak operating results

(excluding a one time merger-related gain) in the second quarter of 2012, compared with the same

period a year earlier. We still expect the company's financial strength to improve by the end of

the year, partly due to increased sugar production.

Noble's total borrowings declined in the second quarter due to lower working

capital. The company's funds from operations (FFO) for the 12 months ended

June 30, 2012, improved compared with that in the 12 months ended March 31,

2012, with the ratio of FFO to adjusted debt improving to 14%, from 12%. We

expect the ratio to further improve to 20% in the second half of 2012 due to

capital proceeds from the merger of Noble's erstwhile consolidated subsidiary

Gloucestor Coal and Yancoal Australia.

Lower-than-expected profitability in the agriculture business contributed to

Noble's weak operating performance in the second quarter of 2012. Operating

income in the segment dropped 69% year on year mainly due to negative crushing

margin in China and poor sugar production due to heavy rain in Brazil.

Operating income from supply chain also fell 14% from the previous quarter and

10% year on year. The Brazilian sugar mills that Noble acquired in June 2011

performed below our expectation. Weak production in the second quarter of

2012, when harvesting was expected, demonstrates Noble's increased exposure to

weather risk from its largest-ever acquisition. Operating profit for the

agriculture segment was slightly better than in the first quarter, which was

also very weak. The operating profit of the energy and metals, minerals, and

ores segments also fell quarterly, while the energy segment rose 37% year on

year due to the favorable performance of the coal, oil, gas, and power

businesses. Noble's net income improved significantly on both a quarterly and

a year-on-year basis due to lower costs and US$63 million special dividends

from the Gloucester Coal and Yancoal Australia merger.

Source: http://news.yahoo.com/text-p-noble-group-rating-unaffected-results-104529469--sector.html

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