Noble Group reports 1H19 net profit on energy and minerals contributions

Singapore container portSingapore’s container port

Noble Group Holding, the “New Noble” that emerged after restructuring the troubled commodity trader, reported Monday a first half net profit of US$45.91 million on strong global demand for the company’s traded commodities.

“While prices demonstrated some volatility and were generally lower during the period compared to 2018 levels, the company navigated the external environment to report a successful half year,” Noble said in a statement published to its website.

Paul Brough, executive chairman of Noble, was upbeat on the results.

“We hope to make further progress in the second half of the year should trading conditions permit,” Brough said in the statement. “We will continue to remain focused on our core strengths and our unparalleled supply chain management expertise; Noble Holdings is well placed to continue providing excellent value to our customers.”

Trading Co.

Trading Co. Group reported first half earnings before interest, tax, depreciation and amortization (EBITDA) of US$110.2 million on revenue of US$1.56 billion. Volumes were 12.3 million tonnes for the energy segment and 9.6 million tonnes for the metals, minerals and ores segment, the statement said.

Noble said it expected volumes to increase in the second half of the year as Trading Co. delivers on core flows and builds out new long-term partnerships. It added the gross margin was strong at 9.2 percent and was expected to normalize over the second half.

Trading Co. Group operates the commodities supply chain management business for the energy segment and the metals, minerals and ores segment, as well as providing management services to the Asset Co., Noble said.

Asset Co.

Asset Co. reported first half EBITDA of US$40.2 million on revenue of US$259.1 million, benefiting from a good performance by Jamaican bauxite mining and alumina refiner Jamalco on a strong alumina price environment.

But Noble added unscheduled power outages and a lower alumina pricing environment in the second quarter negatively impacted EBITDA.

Asset Co. holds Noble’s interests in Harbour Energy and its vessels and its beneficial interests in Jamalco and Noble Plantations, Noble said.

“Going forward, Asset Co. Group remains focused on working with its investment partners related to its strategic investments in Jamalco and Harbour Energy, along with pursuing disposals of its interests in vessels,” Noble said, noting it has announced the sale of Noble Plantations for US$67 million.

“Old Noble”

The previous entity, or “Old Noble,” had faced a gamut of a once-anonymous critic, Iceberg Research, whose allegations of accounting issues had weighed its share price, as well as a prolonged commodity-price slump which sapped its earnings over a period of years.

The company also faced controversy over the twists and turns in its efforts to restructure into New Noble and leave behind much of its debt.

The long-running restructuring drama reached a milestone in a completed restructuring deal in December. In November, Noble requested its shares be suspended from trade permanently. The shares closed at S$0.081 on that day, a far cry from their height of around S$18.14 touched in early 2011.

In December, however, the Singapore Police Force, the Monetary Authority of Singapore and Singapore Exchange Regulation jointly said that “Old Noble” wouldn’t be allowed to transfer its listing on SGX to the new entity, citing “significant uncertainties” on its financial position.

That left the stakeholders in New Noble without an exchange to trade their shares.

Late last year, Singapore authorities said they were investigating “Old Noble” over suspected accounting irregularities. In December, “Old Noble” said it would cooperate with the authorities and that it held a “strong view” that its accounting complied with regulations.

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