UPDATE 2-Agricultural losses hit Singapore's Noble Group
* Noble's quarterly net profit falls 68 pct
* Ag unit posts $53.7 mln operating loss in 2nd quarter
* Noble's metals unit enters alumina deal with Jamaica
SINGAPORE, Aug 7 (Reuters) - Singapore-listed commodities trader Noble Group Ltd's second-quarter net profit fell 68 percent, it said on Wednesday, with results weighed on by a loss in its agricultural division and a drop in overall margins.
Hong Kong-based Noble, Asia's largest diversified commodities trading company, has lately been seeking to expand its trading operations into ownership and purchase agreements of metals and other commodities.
The company posted a net profit of $62.8 million for the three months that ended in June, down from $194.8 million a year earlier. The net profit margin fell to 0.25 percent from 0.80 percent.
Noble's agriculture unit reported an operating loss of $53.7 million for the quarter, which compared with an operating profit of $51.1 million in the same period last year.
"The loss was primarily driven by continued low prices in sugar that obviously impacted our performance there, as well as continued logistic issues for us in Brazil," Chief Executive Yusuf Alireza said on a conference call.
Operating income for its energy business was up 12 percent at $351.3 million, while its metals, minerals and ores segment posted an 86 percent rise to $55.5 million.
While Noble will continue to increase its business organically, it recognised that changes in the industry are creating opportunities, Alireza said when asked if the company is interested in possible acquisitions.
"We are very cognisant that the industry is changing and as a result of the potential changes in the industry and regulatory changes, and companies getting out of the business, there may be significant opportunities for us," he said.
JPMorgan Chase & Co said last month it would seek "strategic alternatives" for its physical oil, gas, power and metals trading division, amid a crackdown by U.S. regulators on banks owning commodities storage facilities.
"We have been and will continue to look at all those opportunities, but we will be disciplined about executing on those opportunities in terms of the strength and the liquidity of our balance sheet," Alireza said.
Noble last year began gearing up for a big push into the base metals markets, hiring two senior traders to build out beyond its home base in Asia.
Noble identified one such opportunity in metals with its recent alumina off-take agreement with Clarendon Alumina Partners (CAP), owned by the Government of Jamaica.
On Aug. 2, Jamaica's Ministry of Mining announced that Clarendon made its first alumina shipment to Noble on July 31 under a new agreement that would give Noble "more alumina off-take and financing contracts, along with the opportunity to finalise new investor relations arrangements, including an energy solution for the JAMALCO plant."
CAP is the Jamaican government's holding company for its 45 percent stake in a joint venture with a Alcoa Inc's Jamalco subsidiary, a bauxite miner and alumina refiner.
A Jamaican press report on Wednesday said Noble was also negotiating for a stake in Clarendon. And the Jamaican government said in its Aug. 2 announcement that it was reconsidering all of its options, including one for Glencore Xstrata Plc to buy CAP's interest in Jamalco.
Terms of the Noble deal are undisclosed because of pending legal action over a long-term contract with Glencore, a Noble competitor, and the Jamaican government.
Fitch Ratings said in a January ratings release regarding Clarendon debt that "CAP has two remaining unfavorable alumina off-take contracts for a total of 652,500 tonnes in 2013 and 637,500 tonnes in 2014 and the same amount in 2015."
The Jamaican government has said for several years that it sought a buyer of its Clarendon holding.