Noble Group reports Q1 net profit of US$106.6m

SINGAPORE: Singapore-listed Noble Group on Tuesday (May 5) reported a first-quarter net profit of US$106.6 million (S$142 million), turning around from a loss of US$240 million in the previous three months.

It also said its revolving credit facility has received full commitments for the targeted US$2.25 billion, in a sign that bankers have kept faith with the firm despite recent allegations about its accounting practice.

Hong Kong-based Noble, which is one of Asia's largest commodities firm, said profit for the three months ended March was driven by "encouraging performances" from the oil liquids and metals businesses, while operations more exposed to the slowdown in the Chinese economy managed to put in "credible performances".

The group had reported a net loss for the last quarter of 2014 after making some US$400 million in writedowns and other charges.

Noble's net profit for the first three months of 2015 was, however, 30 per cent lower when compared to the same period a year ago, while revenues for the quarter fell 7 per cent from a year ago to US$16.6 billion.

Noble's share price has fallen by around 22 per cent since the start of the year, as entities such as Iceberg Research and US short-seller Muddy Waters questioned the firm's accounts.

The group has denied the claims, and recently initiated legal action against a former employee it accused of being behind Iceberg.
Noble shares rose 4.1 per cent on Tuesday ahead of its results, which were announced after the market closed.  

- CNA/hs

Suitors circle Noble after commodity trader's $1.8 billion plunge

REUTERS

Singapore-listed Noble Group's 30 percent share-slump over the past month has thrust it onto the radar screens of Asian companies that want a bigger clout in global commodities trading, people familiar with the matter said.

Chinese and Japanese companies have held informal talks with investment banks about potentially making approaches to Hong Kong-headquartered Noble, a Singapore-based banker aware of the matter told Reuters, even though founder and top shareholder Richard Elman has been keen on the group staying independent.

Noble's market value has shrunk by $1.8 billion since little-known Iceberg Research accused it in mid-February of inflating asset values by billions of dollars through aggressive accounting. Noble has rejected the claim and linked Iceberg to an employee it fired in 2013.

Large companies that control the supply chain in raw materials such as Noble appeal to Chinese and Japanese firms that are looking to increase their pricing power and control costs in the commodities industry.

 "The stock slump is flushing out buyers," said the banker. "Noble has been very focused on staying independent but it's hard to see it staying that way now after the price fall and accounting issues," he said.

The banker declined to name the potential suitors as the talks were confidential. Other M&A bankers who have worked with Chinese state-owned companies mentioned China Minmetals, Brightoil Petroleum and Singapore state investor Temasek Holdings as potentially interested parties in acquiring Noble.

Bankers cautioned though that there were no active discussions between Noble and potential suitors and it was unclear whether any interested parties would actually proceed with a proposal.

The sources declined to be identified as the discussions are confidential. Brightoil declined to comment, while a Beijing-based spokesman for China Minmetals said he was not aware of any such plans. Temasek declined to comment on "speculation".

Read MoreWho's behind this company's share price drop?

Noble, in response to questions from Reuters, declined to comment on any likely suitors, adding its focus remained on "ensuring that we run our day to day business as efficiently as possible".

Scarcity value
 
Elman, 75, who began his career in a scrap yard in England at the age of 15, has transformed Noble into one of the world's biggest suppliers of commodities from coal and iron ore to coffee. The energy business accounts for the bulk of its revenue and profits.

"There is a scarcity value attached to Noble because there are hardly any listed commodity players," said the Singapore banker.

Last year, a Temasek-led consortium made a buyout offer for agricultural commodities trader Olam International , more than a year after short seller Muddy Waters raised questions about Olam's finances, sparking a stock slump.

Elman, who has recently raised his stake to nearly 21 percent in Noble, though is unlikely to be pressured into a sale, despite the slump in prices of several commodities, people familiar with his thinking said.

"Elman is known to hold a multi-decade view on commodity prices. He is not the one to sell at the bottom of the cycle," said one person who has previously advised Noble.

It was not immediately clear what Noble's other significant shareholders think about a sale. China Investment (CIC), Orbis Investment, Templeton and INVESCO cumulatively own more than 27 percent of the company, Reuters data shows. 

Bankers say CIC's 9.4 percent stake in Noble would make it easier for a Chinese state-owned company to propose an offer. 

CIC and Templeton didn't respond to a Reuters query, while INVESCO and Orbis declined to comment.

Noble Group's FY14 profit tumbles 46%; writes off US$200m for Yancoal

NOBLE Group's net profit in 2014 fell 46 per cent to US$132 million, despite a rise in revenue, as its losses on supply chain assets soared.

The largest commodities trader in Asia by sales saw revenue grow 4 per cent to US$85.8 billion, on volume growth from 187.2 million tonnes to 215 million tonnes.

But losses on supply chain assets rose six-fold to US$290.1 million, from US$46.2 million a year ago.

The group said that it had written off US$438 million for the year, including US$200 million for Yancoal, the valuation for which has been criticised by research firm Iceberg Research.

 The research firm had questioned Noble's accounting treatment of certain subsidiaries and said that the group overstated the value of Yancoal by US$603 million
.
Noble Group declared a dividend of US$0.007 for each share, compared with US$0.0091 in 2013.

Noble Group, which has halted trading of its shares after a second report by Iceberg, is expected to provide further details of its rebuttal against the research firm in a conference call later on Thursday evening.



NOBLE Group has fingered a former employee as the person behind Iceberg Research, as it reported on Thursday its first quarterly loss in three years due to a heavy impairment charge on an associate.

The author of the research reports is a "disgruntled" former employee that the group fired 11/2 years ago, Noble chief executive Yusuf Alireza revealed in a briefing call.

"We have a high degree of confidence we know who it is," he said. The company has handed the information over to the regulators and does not intend to take any legal action against the person.


"We don't plan to spend any management time on it or shareholders' resources on it... Our stakeholders will judge us not by an anonymous blogger but by our results, and that's what we want to focus on."

The largest commodities trader in Asia by revenue posted a net quarterly loss of US$240 million - its first since September 2011, against a net profit of US$117 million a year ago. For the three months ended Dec 31, revenue dropped 14 per cent to US$21 billion.

For the full year, net profit almost halved to US$132 million, missing by far the average estimate of US$470.6 million by 13 analysts, according to Bloomberg data. Revenue was 4 per cent higher at US$85.8 billion.

Notwithstanding these, "2014 was a landmark year for us", said Mr Alireza, pointing to how the sale of Noble Agri had freed up its balance sheet, and "breakthroughs" in performance and market penetration, in particular by its oil liquids and power businesses in the US.

The group said that it had written off US$438 million for the year, including a US$200 million charge for Yancoal Australia, the valuation for which had been criticised by Iceberg Research.

The little-known research firm had earlier questioned Noble's accounting treatment of certain subsidiaries and said that the group overstated the value of Yancoal - the Australia-listed coal miner in which Noble has a 13 per cent stake - by US$603 million.

Noble, however, said that its latest results had not been affected "in any way" by the Iceberg report. The group reviews the value of its associates and investments on a quarterly basis, and on a more detailed level annually.

It arrived at the value for Yancoal based on a cash flow model that has been verified by both internal control functions and its auditor EY, and used conservative assumptions around input variables such as production levels, fuel inputs and coal prices.

The model provides for a range of values, and "we have impaired Yancoal right below the bottom of that range", said Mr Alireza, who also called Iceberg's suggestion of using the market capitalisation of Yancoal as its value "naive".

Both its board and auditor are comfortable with the adjustments in value, he added.

Noble's shares have fallen 12 per cent since Iceberg published its first report on Feb 15. Its website does not provide any contact details nor other identifying information.

In its second report on Thursday, Iceberg pointed to a "divergence" between Noble's net profit and operating cash flow as a result of Noble overstating the fair value of its long-term contracts.

Noble has a practice of booking the entire profit for long-term unrealised contracts the same day they are signed, said Iceberg. It also suggested that Noble had manipulated projections for forward prices and tonnage to inflate the fair values of these contracts. "These contracts surged from near zero in 2009 to an unprecedented net US$3.8 billion," it said in a 28-page report released before Noble announced its results.

Impairing these values would "dramatically impact" Noble's financial performance.

Iceberg further accused Noble of stretching accounting rules "to the maximum", though it said that there was no outright accounting fraud.

Noble rejected these claims of inflated unrealised contract values as "factually incorrect". Iceberg had ignored the fair value of inventory, and the effect of short-term rolling hedging versus the long-term physical contracts, it said.

The group has a consistent mark to market - or the practice in measuring the fair value of its contracts - policy, Mr Alireza emphasised. "This is our core business."

As part of the asset-light strategy that the group is pursuing, its business model relies on the group's ability to manage market, credit and operational risks for buyers and sellers. The group manages 12,000 contracts with a weighted average duration of five years.

These are marked to market in order to provide profit and loss figures daily, said Mr Alireza. "It's a function of risk management."

Iceberg Research is expected to release a third report that will focus on Noble's debt levels and its investment grade credit rating. Noble's shares, which were suspended on Thursday morning following the second attack by Iceberg, will resume trading on Friday.

Noble Group nine month 2014 profits treble to US$ 372 million

Net profit of US$372 million - treble the prior nine month period in 2013

Record Group revenue of US$77 billion and record Group operating income from supply chains of US$1.2 billion, 4% and 12% growth year-on-year

Successful closing of the Noble Agri joint venture with COFCO and the consortium of international investors

Special dividend of US$0.03 per share to be paid in early December [CW8888: One shot of special effect Panadol for temporary good feeling]

Strong pipeline of opportunities across products and geographies

Third update: Noble shares tumble, traders fear CIC could sell more shares

By anita gabriel

 

THE sharp fall in Noble Group's shares on Tuesday signalled that investors fear there could be more share sale ahead by the commodity trader's major shareholder China Investment Corp (CIC), said Maybank Kim Eng Research.

Noble shares fell 10 Singapore cents or over 7 per cent to S$1.295 on Tuesday on news reports that CIC is looking to raise as much as S$405 million by selling about a third of its shares in the commodity firm via a married deal.

The company drew a trading activity query from the Singapore Exchange as a result of the steep fall. The counter jumped to the top active list in the morning session with some 390 million shares worth some S$511 million done.

It is not positive that China's largest sovereign wealth fund is actually cutting losses on their long-term investment based on their original cost. This is especially so considering that Noble was supposed to be a strategic investment for CIC, indirectly helping China manage their raw material requirements," said Maybank Kim Eng.

 

Noble, EIG in venture to own and operate energy assets

[TOKYO] Noble Group Ltd, Asia's largest commodity trader by sales, formed an energy venture with private equity firm EIG Global Energy Partners LLC to invest in assets worldwide.

The venture, Harbour Energy Ltd, will own and operate energy extraction and processing assets, with Noble the preferred buyer and re-seller of its products, the venture partners said yesterday. Harbour Energy will be funded solely by Noble and EIG, the companies said.

Noble has been moving away from full control of commodities or energy assets, instead favouring investments in firms that manage such businesses. The Hong Kong-based company's strategy means it can secure raw materials for resale without being committed to the running of a mine or oil field.

"This transaction represents a significant milestone in the continued implementation of Noble's 'asset light' strategy, exploiting our best in class expertise in logistics and supply chain management, while partnering with market leading asset managers and owners," Noble chief executive officer Yusuf Alireza said.

China's Cofco to buy 51% of Noble's unit for US$1.6b

By

Angela Tan angelat@sph.com.sg

         

Cofco Corp., China's largest food company, has agreed to buy a majority stake in Noble Group's agriculture unit in a deal that values the latter at US$3.22 billion - PHOTO: REUTERS

Cofco Corp., China's largest food company, has agreed to buy a majority stake in Noble Group's agriculture unit in a deal that values the latter at US$3.22 billion.

On Wednesday, Noble said Cofco (Hong Kong) Limited, a unit of Cofco Corp, joined by Hopu Investment Management Co., a private-equity fund, will buy 51 per cent of its unit, Noble Agri International Limited (NAL) for US$1.6 billion.

If successful, Noble said the estimated gain from the sale is US$64.80 million.

The proposed sale price is equal to 1.15 times of 51 per cent of the audited book value of NAL for the financial year ending December 31, 2014.

Noble Group says in talks with consortium on agribusiness joint venture

[SINGAPORE]Singapore-listed commodities firm Noble Group Ltd said on Tuesday it is in talks with a consortium for a potential joint venture on its agriculture business.

"No binding arrangements have as yet been entered into with respect to this transaction and, accordingly, there can be no assurance that this transaction will be concluded," Noble said in a filing to the Singapore stock exchange.

The company did not disclose the consortium.

China's biggest grains trader COFCO Corp is in talks to buy Noble's agribusiness arm, in a deal that would value the division at around US$1 billion, people familiar with the matter told Reuters. - Reuters

Noble's 2013 profit down by nearly half

By

andrea soh sandrea@sph.com.sg

        

NOBLE Group's 2013 earnings tumbled 48 per cent to US$243 million, as losses on supply chain assets and from associates spiked.

Net profit attributable to shareholders fell to US$243.5 million, from US$471.3 million a year ago. This translates to earnings of 3.4 US cents per share, compared with 7.06 US cents before.

Revenue inched up 4 per cent to US$97.8 billion.

The group's losses on supply chain assets spiked from US$488,000 in 2012 to US$65.8 million, while its share of losses from associates rose seven-fold from US$14.8 million to US$106.1 million.

Noble Q3 profit plunges 70%

By andrea soh

                         

        

HIT by losses from Yancoal Australia, of which it owns 13 per cent, Noble Group's third quarter profit plunged 70 per cent to US$22.9 million.

Revenue rose 13 per cent to US$25.6 billion.

Noble suffered a loss of US$7.1 million on its supply chain assets, compared with a profit of US$8.13 million last year.

An additional loss of US$90.1 million from its share in associates' results further eroded the bottomline. Last year it recorded $822,000 in share of profits from associates.

Noble's profit drops 68%

By

andrea soh

         

COMMODITY trading firms continued on their weak showing this quarter with Noble Group's earnings falling 68 per cent.

The largest commodity trader by revenue made net profit of US$62.8 million, down from US$194.8 million a year ago.

Revenue rose by 5 per cent from last year to US$25.3 billion.

But a larger increase in cost of sales and services, losses on supply chain assets and losses from associates eroded the bottomline.

Noble's US$400m bond issue 6 times oversubscribed

Firm's credit rating outlook changed to 'stable' after release of results recently

 

By

andrea soh

 

This bond marks our first return to the US dollar market since 2010 - PHOTO : BLOOMBERG

  

NOBLE Group successfully priced on Wednesday its five-year US$400 million (S$500 million) bonds, which received a warm response from investors.

 

The bonds, which will pay 3.625 per cent coupon twice a year, will be priced at 99.268 per cent of the principal amount.

Demand was healthy, with the bonds being more than six times oversubscribed by over 200 accounts from Asia and Europe, the commodities firm said yesterday.

"This bond marks our first return to the US dollar market since 2010. We are delighted with the outstanding investor response," said group treasurer Wildrik de Blank, adding that the firm has been able to extend its debt maturity profile and lock in cheap funding with the bond issuance.

Noble Group: Maybank Kim Eng Research, Dec 20

WE SEE Noble as most leveraged to an improvement in China's economic activity in 2013, especially industrial output. Excluding its oil & gas business, China is its single biggest market, which we estimate accounts for more than 30 per cent of total group tonnage. Its importance as a commodity supplier was also likely a key consideration when China Investment Corp took up a substantial stake in 2009.

While on-ground assets in China are quite light (limited to oilseed crushing and storage), Noble is one of the largest suppliers of hard commodities such as coal and iron ore into China, sourced from other countries. Improved demand in 2013 could mark a significant turnaround in profitability.

Noble has a business and asset footprint across the world, and is involved from energy to soft commodities. We believe this should allow them better opportunities to deploy capital profitably. Its earnings over the past 12 months have also been generated through lower values at risk (VARs) (0.52 per cent in Q3 2012), which may imply upside if 2013 turns out to be a conducive year for commodities demand.

Noble Slides After Vice Chairman Sells Stake: Singapore Mover

By Michelle Yun

Noble Group Ltd. (NOBL) slipped to a three- month low in Singapore trading after Vice Chairman Emeritus Harindarpal Singh Banga sold a 3.5 percent stake in the commodity supplier that reported lower-than-expected earnings last week.

Noble fell 7.3 percent after Banga offered 225  million shares for sale at a discount of as much as 5.6 percent to Noble’s previous close. Excluding the stake, 71 million shares changed hands as of 12:40 p.m. local time, compared with average daily volume of 45.5 million in the past year.

“It’s not a good sign when a director sells,” said Mervin Song, an analyst at DBS Vickers Securities (Singapore) Pte. in Singapore. “He would know more than most people.” Stephen Brown, spokesman for Hong Kong-based Noble, said the company wouldn’t comment on Banga’s private sale. Banga wasn’t immediately available when a call was made to his office.

Noble, Asia’s biggest publicly listed commodity trader, reported third-quarter profit of $75.2 million on Nov. 8, missing the $154.6 million mean estimate of seven analysts. Earnings at Noble’s three units - agriculture, energy and metals - fell short of their expectations, Macquarie Capital Securities (Singapore) Pte. said that day in a report.

The stock dropped as much as 8.2 percent to S$1.07 in Singapore and was down at S$1.08 at 12:51 p.m. local time. The benchmark Straits Times index lost 0.6 percent.

A block trade of 225 million shares crossed at 8:31 a.m. in Singapore at S$1.10 apiece after Banga offered to sell the stake at S$1.10 to S$1.12 each, according to a term sheet obtained by Bloomberg News.

Banga, who sold 115 million shares in March, owned 372.5 million shares, or about 5.7 percent of Noble, before the latest sale, data compiled by Bloomberg show.

Banga offered his shares through Lexdale International, which is controlled by Banga and his spouse, according to the company’s annual report.


 

Noble and Olam figure in Forbes Asia's Fab 50 list

By

teo li wen

         

TWO Singapore-listed companies are in this year's Forbes Asia Fabulous 50 list - Noble Group for the seventh straight time and Olam International for the third time and the first since 2010.

"This year's list separates the merely good companies from the truly great ones, producing a list of the best 50 big, publicly traded companies in the Asia-Pacific region," said Forbes Asia.

The Fab 50 companies are chosen from a pool of 1,295 publicly traded companies with an annual revenue or market capitalisation of at least US$3 billion. They are assessed on their revenue, earnings, return on capital, share price movements and outlook.

Noble, described as Asia's largest commodity trading firm, comes under the category of Hong Kong, where it is headquartered. Its appearance on the list for seven years in a row - with sales of US$80.9 billion and market value of US$6.5 billion - is the longest Fab 50 streak.

Noble eyes agricultural assets in US

[HONG KONG] Noble Group Ltd, Asia's biggest listed commodity supplier, will target agricultural assets in the United States as it seeks to meet demand from China and sees potential for deals across its units.

"It's hard to be the supplier and partner of choice for China in the grain space, and especially in the corn space, without having significant origination assets in the US," CEO Yusuf Alireza said yesterday. "Over the medium term, that's an investment we're looking to make."

Noble announced at least US$2 billion of deals in the past three years as it built its sugar operations in Brazil and energy assets in the US and Australia.

"We're seeing a consolidation process in the agriculture sector and that's going to arise very significant opportunities," Mr Alireza said. Noble is considering different options including acquisitions and potential partnership with US companies, he added.

---------------

Createwealth8888:

Probably, there will be no more IPO of its Agricultural unit.

Australian shareholders OK Gloucester-Yancoal deal

Shareholders on Monday voted in favour of Gloucester Coal's tie-up with China's Yancoal, paving the way for what is expected to be Australia's largest listed coal firm.

The approval comes after the Australian government's foreign investments watchdog gave the go=ahead to the deal in March and after the merger met Hong Kong Stock Exchange regulations. It still requires Chinese regulatory approval.

"Gloucester shareholders have voted overwhelmingly in favour of the scheme of arrangement for the proposed merger of Gloucester and Yancoal Australia Limited," the company said in a statement.

The deal approved by 99.98 percent of votes cast will see the creation of a newly-merged coal titan, with resources of some 3.4 billion tonnes and valued by local media at $8-$9 billion.

Yancoal, the Australian subsidiary of China's Yanzhou Coal, has described the new firm as the "leading listed pure-play coal company in Australia and the ninth-largest globally based on reserves."

The merger, yet to be approved by the Victorian Supreme Court, gives energy-hungry China a greater foothold in Australia's lucrative coal market and comes amid consolidation in the sector.

If approved by the court on Friday, Gloucester's shareholders are set to receive Aus$3.15 cash and a share in the new entity for each of their shares.

Yanzhou, Yancoal's parent company, will initially hold 78 percent of the new firm, Singapore's commodities giant Noble 13 percent and Gloucester's remaining shareholders nine percent.

Noble Turns In Disappointing 1Q12 Results

Noble group said that its 1Q12 profit almost halved as it recorded losses from supply chain assets and a slow agriculture season. 1Q12 net profit stood at US$110.1 million, a 46 percent year-on-year drop despite an increase in revenue to US$22.8 billion. The stark difference in bottom and top line performance pointed to a shrinkage in net profit margin to 0.48 percent from 1.01 percent in 1Q12. Noble remarked that a significant portion of the decline came from a US$78 million plummet in supply chain asset income. Separately, it said that its current divestment of its stake in Australia’s Gloucester Coal is on track and it should be able to sell its Brazilian liquid bulk terminal and storage facility provider, Terminal Maritimo do Maranhao soon.

Australia approves Gloucester-Yancoal mining merger

SYDNEY : Canberra on Thursday approved a multibillion dollar tie-up between Gloucester Coal and China's Yancoal, clearing the way for a deal that will create Australia's largest listed coal firm.


Treasurer Wayne Swan said the country's foreign investments watchdog had green-lighted the deal under strict conditions that the new company remain headquartered in Australia and list on the stock exchange by the end of 2012.

Noble says to get US$440 mln in Gloucester merger

LONDON - Singapore-listed commodity trader Noble Group will vote all its shares in Australia's Gloucester Coal in favour of a merger with Yancoal Australia and will get A$412 million (US$440 million) under the deal terms.
On completion of the merger, Yancoal is expected to be the largest independent listed Australian coal miner, Noble, which owns nearly two-thirds of Gloucester, said on Tuesday.

China's Yanzhou Coal Mining Company Limited, Yancoal's majority owner, has a clearly stated aim of growing its Australian mining business.

Yanzhou bought Australian miner Felix Resources in 2009 for A$3.3 billion and was required to float at least 30 per cent of the business by 2012.

Noble Group will own approximately 13.2 per cent of Yancoal, and William Randall, Noble director and Head of Hard Commodities, will join the Yancoal board of directors.

Gloucester produced 5 million tonnes of coal in 2011 but plans to expand substantially over the next decade, while Yancoal exported 8.1 million tonnes in 2010.

Commenting on the merger, Noble Group chairman, Richard Elman said: 'Creation of scale and flexibility is increasingly important in commodity production. Yancoal will have a multi-product, multi-mine operation of scale, which is extremely well positioned to deliver value to shareholders.'

Under the final agreement terms, shareholders in Sydney-based Gloucester will own 22 per cent of Yancoal and China's Yanzhou Coal Mining Company Limited will own 78 per cent.

Separate to the merger, eligible Gloucester shareholders will receive A$3.15 cash per Gloucester share.

The Gloucester board has also unanimously recommended shareholders vote for the merger.

Shares in Gloucester leapt in December after Yanzhou announced its intention to merge in a A$700 million deal .

Noble, whose businesses range from cotton and sugar to coal and iron ore, earned US$106 million in the fourth quarter of 2011 for a full-year profit of US$431 million, but like many traders it suffered from volatile markets and poor processing margins. -- REUTERS