May 6 (Bloomberg) -- Noble Group Ltd., the commodities supplier part-owned by China Investment Corp., said first- quarter profit rose 28 percent as demand and prices of coal, iron ore and aluminum improved with the economic recovery.

Net income increased to $115 million, or 2.86 cents a share, for the three months ended March 31, from $90.2 million, or 2.77 cents, a year earlier, Hong Kong-based Noble said in a statement to the Singapore Exchange. Sales surged 87 percent to a quarterly record of $11.4 billion.

Noble is seeking to double annual profit to $1 billion in three years as consumption of sugar, grains, coal and other resources increases in Asia with rising incomes. An attempt to become the largest shareholder in Australia’s Macarthur Coal Ltd. failed last month amid a takeover battle for the world’s biggest exporter of pulverized coal.

“Buying Noble is buying into the economic recovery,” Ben Santoso, an analyst at DBS Securities (Singapore) Pte, said before the results. “Noble should be reaping rewards from its recent investments,” including a soybean crushing plant in Argentina, he said.

Noble, which got 72 percent of gross profit last year from its energy and agriculture businesses, fell 1.4 percent to close at S$2.88 in Singapore trading. The earnings were released after the market closed.

Strong Results

“Our grain, oil and gas, and coal and coke divisions all demonstrated strong results in the first quarter,” Chairman Richard Elman said in a statement. “We’re beginning to see the positive impact from our investments.”

The company, which supplies oilseeds, soybeans, wheat, cotton, coal and iron ore, doubled capital expenditure to $1.1 billion last year, according to a February presentation.

Gross profit from its energy business, the largest earner, tripled to $107.8 million, and earnings at its metals, minerals and ores unit, the second biggest, rose more than three-fold to $74.3 million.

Noble, which classifies coking coal and coke used in steelmaking in its energy business, said “higher volumes and higher margins” for the materials helped drive earnings in the division. Aluminum and iron ore pushed up its minerals and ores unit’s profit, it said.

Gross profit from agriculture slipped 10 percent from a year ago to $96 million as its Chinese crushing business was hurt by “excessive imports by PRC-based crushers in an oversupplied market,” the company said.

Brazilian Plant

“Our investment in Noble Petro, our U.S.-based oil storage and terminal business has performed well,” Elman said. “Our Timbues and Santos facilities came online in the quarter and will contribute to our business and financial performance over the year.”

Noble completed its Timbues soybean crushing plant in Argentina and its Santos dry bulk terminal in Brazil in April. It expects to finish a $347 million sugar refinery and ethanol processing facility in Brazil in July 2011.

Shareholders of Noble last month rejected Brisbane-based Macarthur’s planned takeover of Gloucester Coal Ltd. Noble, the biggest shareholder in Gloucester, would have become Macarthur’s largest holder if the deal had been approved.

“We’re quite happy with the assets that we own in Australia, and we have decided that we’ll continue with our solo strategy regarding our coal assets in Australia,” Ricardo Leiman, Noble’s chief executive officer, said on a conference call after the earnings release.

Macarthur is the target of a A$4.1 billion ($3.8 billion) bid from St. Louis-based Peabody Energy Corp., the largest U.S. coal producer.

Noble raised about $5 billion through debt and equity sales last year as it added coal mines in Australia, with China’s sovereign wealth fund becoming its second-largest shareholder.

--With assistance from Yee Kai Pin in Singapore. Editors: TanHwee Ann, Richard Dobson.

To contact the reporter for this story: Claire Leow in Singapore at cleow@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs@bloomberg.net

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