Red ink continues to flow at Noble in Q1

Noble handled trading volumes of 16.5 million tonnes, down from 22.3 million tonnes a year earlier. Its coal division, which was meant to form its core business after restructuring, posted an operating loss.
Noble handled trading volumes of 16.5 million tonnes, down from 22.3 million tonnes a year earlier. Its coal division, which was meant to form its core business after restructuring, posted an operating loss.PHOTO: BLOOMBERG

Liquidity and financing constraints hit performance

Constraints on liquidity and availability of trade finance continued to dampen commodity trader Noble's performance in the first quarter.

Net loss shrank to US$71.5 million (S$96 million), from a net loss of US$129.3 million a year earlier, it said yesterday.

Revenue tumbled 39 per cent in the three months to March 31 to US$1.21 billion, as financing constraints meant the group was unable to take advantage of stronger global commodity markets.

Noble's operating loss was exacerbated by a deeper net loss on supply chain assets, from US$5.75 million a year earlier to US$57.3 million.

But this was offset by a jump in the share of profits from joint ventures to US$133.8 million, from US$3.15 million last year, due to a fair value increase in Noble's 75 per cent stake in energy investment vehicle Harbour Energy.

Noble handled trading volumes of 16.5 million tonnes, down from 22.3 million tonnes a year earlier. Its coal division, which was meant to form its core business post-restructuring, recorded an operating loss.

  • AT A GLANCE

    REVENUE: US$1.21 billion (-39%)

    NET LOSS: US$71.5 million (comparison not meaningful)

The group also recorded restructuring expenses of US$19.1 million, but chairman Paul Brough declined to respond to questions during an earnings briefing on how much total restructuring expenses would come up to.

He said the next key dates for the restructuring would be the publication of its circular to shareholders and the convening of a special general meeting.

Mr Brough added that the final timeline would depend on the approval of regulators.

Noble has submitted early drafts of the circular to the Singapore Exchange (SGX).

Last week, it appointed Provenance Capital as an independent financial adviser to proffer an opinion on its restructuring plans, bringing it into compliance with a March 8 SGX requirement. Provenance's assessment will be included in the shareholder circular.

Earlier yesterday, Iceberg Research - whose criticism of the firm's accounting practices helped send it into a downward spiral - said it had the power to scupper the restructuring plan.

"We were informed by our lawyers that any restructuring that would thwart or hinder our ability to recover our legal costs by transferring assets to a new entity would be potentially void and reversible," wrote Iceberg on its website.

"In other words, we can reverse the restructuring plan."

An external media representative for Noble declined to comment.

Noble shares closed down 0.1 cent to 7.9 cents yesterday before the results were announced.

A version of this article appeared in the print edition of The Straits Times on May 16, 2018, with the headline 'Red ink continues to flow at Noble in Q1'. Print Edition | Subscribe