Noble posts $1.75 bln loss; debt continues to swell

Commodity trader Noble Group on Thursday posted a quarterly loss of as it tries to rope-in strategic investor to end restructuring.

Noble Group

Commodity trader Noble Group on Thursday reported a quarterly loss and a surge in debt as it tries to rope-in strategic investor to end restructuring.

The Singapore-listed trading house, which has been hammered by two years of attacks on its accounting during a commodity slump, posted a net loss of US$1.75 billion in the second quarter.

That compared to a net loss of US$54.9 million a year ago, and US$1.2 billion in one-off charges.

Revenues declined 2.6 percent to $22.54 billion.

Noble said its net debt increased by $945 million during the six months to $3.82 billion at June-end, driven by normal course fluctuations in working capital, reinvestment in Harbour Energy and negative cash flow from underlying activities.

The Hong Kong-based group has been battered by a savage downturn in commodity markets and concerns about its accounting.

The company, which commenced its strategic review earlier this year, has been forced to shrink its business, exiting loss-making and non-core operations in order to survive.

Last month, Noble Group said it would sell its remaining North American gas and power business and reduce 56 percent of its workforce in a bid to reduce debt.

The loss in the June quarter largely stems from revaluing long-term coal contracts, whose valuation had been criticized by Iceberg Research, a group that first raised concerns more than two years ago.

Iceberg claims that Noble fabricated profit by inflating the value of its contracts by billions and that the company needs billions from a new investor to repair its balance sheet and reverse its huge operating cash outflow.

Shares in the company fell 2.8 percent to S$0.350 onthe Singapore Exchange. Its market capitalisation is now reduced to just over $300 million from $6 billion in February 2015.