Iceberg says will issue short research note on Noble Group

[SINGAPORE] Iceberg Research says it will issue a short research note on Thursday related to Noble mark-to-market accounting methods, which will be its third report on the Singapore-listed commodities group.

Iceberg also reiterated that Noble had to provide more clarity. "Noble has no choice. They need to explain their accounts better because of pressure," it said in its email to Reuters.

Its email came a day after Noble defended its decision to book an impairment charge on the same day it reported earnings and said it would detail its accounting methods in a bid to reassure markets.

Noble has seen US$1 billion wiped off its market value since Iceberg last month said Noble's accounting methods inflated the value of its assets - a claim Noble rejected and blamed on a disgruntled former junior employee.

Since Iceberg's first report, the Hong Kong-based group has reached out to analysts and investors, explaining why it regards the claim as incorrect."Management noted that the key take-away from this episode is that it isn't enough to be professional, but also to be seen to be professional," CLSA analyst Chuanyao Lu, who has a "buy" rating on Noble stock, said in a March 4 report after CLSA hosted a call with Noble management.

CLSA said Noble was looking for ways to provide more disclosure to investors.

Noble is the second major Singapore-listed commodity trader to have its accounting practices challenged by a research firm. Olam International was criticised by Muddy Waters in late 2012, sending its shares falling and prompting state investor Temasek to take majority control.

Pressure on Noble was exacerbated when the company reported an unexpected net loss soon after a second report from Iceberg. Noble said the two issues were unrelated.

In a statement to the stock exchange late on Wednesday, Noble said it conducts an impairment review of long-term assets every quarter and had the option of impairment charges for its stake in miner Yancoal Australia Ltd between zero and US$200 million, based on different assumptions.

The board and management decided on Feb 26, the day of its fourth-quarter and 2014 results, to adopt "the most prudent assumptions" and took an impairment charge of US$200 million, Noble said in its statement, responding to a Business Times report questioning the lack of a profit warning.

On Friday, Noble's shares closed up 1.5 per cent in a weaker market, still down 17 per cent since Iceberg's first report.

In all, Noble took US$438 million in asset writedowns for the fourth-quarter, which pushed the company to a net loss of US$240 million, its first quarterly loss in three years.

REUTERS