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Noble Group expects to report Q3 net loss of US$90m-US$115m

COMMODITIES trader Noble Group issued a profit guidance after trading hours on Monday, warning that it expects to report a total net loss in the range of approximately US$90 million to US$115 million in the third quarter.

This was primarily driven by restructuring expenses, net finance costs and losses from discontinued operations, said the group.

For the nine months of 2018, the total net loss is expected to be in the range of approximately US$290 million to US$315 million.

The expected net loss in Q3 will result in a negative net asset position for the group of approximately US$1.1 billion at Sept 30, 2018.

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In a filing to the Singapore Exchange, while Noble's operating income from supply chains was positive in 3Q 2018, its performance continued to be impacted by the ongoing constraints on liquidity and availability of competitive trade finance to support its operations, along with the impact of restructuring expenses associated with implementing the restructuring.

Noble projects restructuring expenses of approximately US$35 million along with net finance costs and tax in the range of US$35 million to US$45 million in 3Q 2018. The restructuring expenses include items associated with implementing the proposed restructuring, including fees associated with the group's interim trade finance facilities and legal and financial advisory fees.

Also, the group expects to report a loss from discontinued operations of approximately US$55 million. The loss includes amounts relating to its discontinued Global Oil Liquids operations following the completion of the sale of Noble Americas Corp (NAC) on Jan 12 this year. The final determination of the closing date consideration from the sale of NAC is ongoing with the buyer.

The loss from discontinued operations also includes a provision in respect of the group's discontinued Agricultural operations.

However, Noble's board maintained that the proposed financial restructuring, once implemented, "should restore shareholders' equity and create a sustainable capital structure which will allow the group to reposition its business and expand on its position as a leading industrial and energy products supply chain manager in Asia and the Middle East".

The group's consolidated financial statements for the nine months ended Sept 30 will be released on Nov 13.