Noble Q1 profit down 30%

Singapore

WEIGHED down by lower commodity prices and underperformance of two of its "major operational associates", commodities trader Noble Group's net profit for the first quarter ended March 31 plunged 30 per cent to US$106.6 million, from US$152.3 million a year ago. But it was a turnaround from the net loss of US$220 million for the October-December 2014 quarter when it had to take a US$200 million impairment over Australian coal company Yancoal.

For Q1 2015, the group's revenue fell 7 per cent year-on-year to US$16.64 billion. Net profit margin stood at 0.64 per cent, down from 0.85 per cent a year ago. Hong Kong-based Noble said that despite an increase in the group's tonnage from 39.3 million tonnes a year ago to 65.8 million tonnes, turnover was down due to lower commodity prices. Its "two major operational associates", Yancoal and Noble Agri, had also underperformed, lowering group net income by about US$70 million for the quarter. Its more traditional China-related commodities such as iron ore, freight and coal continue to face significant headwinds, and sentiments in these sectors are at historic lows, while investments made in its oil, power & gas and metals franchise over the last few years continue to drive the growth in its bottom line.

Noble, one of Asia's largest commodities traders by revenue, has been accused of inflating its accounts, with a series of attacks by Iceberg Research and short-seller firm Muddy Waters. Its management has denied all allegations but has promised increased disclosures, commencing with its first quarter FY2015 earnings, the release of which was brought forward by two days.

On Tuesday, Noble reported that its net fair value on commodity contracts and derivative financial instruments over the last quarter fell to US$4.17 billion from US$4.57 billion, with the US$393 million decline largely due to the roll-off of short-term contracts in oil liquids.

Noble also announced that it has secured commitments of US$2.25 billion, subject to customary conditions, following the launch of its syndicated committed unsecured revolving loan facility early last month. The funds borrowed under the facility will be used for refinancing of certain of its existing debt and for its generate corporate purposes.

Earnings per share for the quarter stood at 1.54 US cents while net asset value per share was 76 US cents.

Noble shares closed trading up 4.1 per cent at S$0.89 on Tuesday. This was still down 26 per cent since Feb 15 when Iceberg launched its first attack.

READ MORE: Noble tells more but critics left unconvinced