Commodity trader Noble posts 2Q18 net loss narrows amid higher commodity prices

Troubled commodity trader Noble reported on Tuesday that its second quarter net loss narrowed to US$128.3 million from US$1.75 billion in the year-earlier quarter amid higher commodity prices and cost cuts.

Revenue for the quarter fell 26.4 percent on-year to US$1.12 billion, Noble said in a filing to SGX after the market close on Tuesday.

Selling, administrative and operating expenses fell to US$33.8 million in the quarter from US$101.0 million in the year-earlier period, it said. Restructuring expenses for the quarter were US$94.6 million, it said.

“Global commodity prices have been strong over the first six months of 2018, supported by both growth in demand and factors affecting supply such as production cuts and economic sanctions. In particular, prices for alumina and aluminium rallied strongly in the second quarter of2018 on the back of United States sanctions on integrated Russian aluminium producer Rusal, the world’s second largest aluminium company, in April 2018,” Noble said.

“Commodity prices for the group’s other major commodities, including thermal coal, were also stronger in the first six months of 2018
on a year-on-year basis,” it added. “Metals, Minerals and Ores segment results in the first half of 2018 also benefited from higher year-on-year profitability from the group’s Special Ores and Alloys business and steady volumes from the Base Metals business.”

In the first half, the net loss narrowed to US$199.8 million from US$1.88 billion in the year-earlier half year, while revenue fell around 32 percent on-year to US$2.33 billion, Noble said.

Noble said that in the first half, it has been focusing on getting agreement on and implementing its proposed restructuring.

So far, it has recieved support from over 86 percent of existing senior creditors, Noble Holdings Ltd., which is the company’s largest shareholder with a 17.9 percent stake, Goldilocks Investment Co., which holds 8.1 percent of shares, and a consortium including Value Partners and Pinpoint Asset Management, which holds an around 4.4 percent stake, it said.

“The board believes that the proposed restructuring provides the best possible outcome for all stakeholders,” it said.

“The proposed restructuring is expected to result in a sustainable capital structure, and provides for a committed trade finance and hedging facility which is critically important for the Group to continue to trade, reposition its business and expand on its position as a leading industrial and energy products supply chain manager in Asia Pacific and the Middle East,” Noble said.

A special general meeting has been set for 27 August for shareholders to review and vote on the plan, it said.

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