Noble says financials are sound, rubbishes Iceberg report

SINGAPORE - Mainboard-listed Noble Group said its businesses and financials are in robust condition, in a statement responding to the second report by Iceberg Research this morning.

In its latest report, the little known blog claimed that Noble has exaggerated its fair values by booking the returns from long-term, unrealised commodities contracts. At least US$3.8 billion (S$5.1 billion) of such fair value should be impaired, Iceberg said.

Noble rejected these further allegations in a full statement filed to SGX, while trading of its shares still remains halted.

"The Board of Directors and the Management are comfortable that the Group's balance sheet fairly presents its book value under IFRS. All physical contracts which are marked-to-market are fair valued based on market prices, and are discounted based on a risk-adjusted discount rate," the statement read.

"The Group also implements strict governance processes to verify the valuations, including independent verification and validation of price curves. Volume projections are based on independent third party reports on reserves and production volume. Furthermore, most of our partners are listed companies with their own disclosure regimes which require public reporting of expert opinions."

Noble also emphasised that it is not vulnerable to volatility in financing costs.

"For the past few years, the Company has funded itself through long term fixed rate debt in the bond markets, and also swapped much of its floating rate debt to fixed rate."

"As a result the Company has incurred additional cost relative to floating rates which have continued to decline In view of our conservative nature in managing risk, we believe that these additional costs are outweighed by the certainty we have achieved in locking in our long term cost of funding," Noble said.

"To be clear, the statements made by Iceberg are materially and factually inaccurate. Our core businesses are in robust health and the statements made by Iceberg cannot be relied upon in assessing the Company's financial condition."

"In addition, the Iceberg report does not take account of the contributions of our many other businesses, such as Oil Liquids, Power and Gas, and Metals, and our Energy Solutions business," Noble said, adding that it has no plan to raise capital.

Noble will announce its full year results later in the day. Its shares closed unchanged at $1.06 on Wednesday.