Noble Group Records Small 2016 Profit

Posted by Joseph Keefe

Some units operated below potential due to capital
constraints; posts full year profit of $8.7 mln vs huge loss year

Noble Group Ltd reported a net profit of $8.7 million for
full-year 2016 versus a huge loss in the previous year when the
Singapore-listed commodities trader restructured its business
operations, and it outlined further cost cuts for this year.

The Hong Kong-headquartered company is slowly recovering after
the restructuring, and is cutting debt and boosting liquidity
amid a long-term downtrend in commodity prices. In 2015, it
reported a net loss of $1.67 billion, its first in nearly two

"Management continues to pursue the same goals that we laid out
previously - to rationalise low return or loss making businesses
while devoting resources to those core businesses in which we
have a competitive advantage and where we expect to see continued
strong returns over a cycle," Noble said in a statement on

Noble's shares have jumped by about a third this year but are
still down about 70 percent since mid-Feb 2015 when its troubles
started as its accounts were questioned by Iceberg Research.

This sparked a dramatic collapse in its share price and stoked
ratings agency downgrades, forcing a sale of its assets and a
fund raising to allay financing worries in a brutal commodities
market. Noble has stood by its accounts.

Noble's revenue declined 30 percent to $46.5 billion last year,
with some of its businesses operating below their earnings
potential due to capital constraints. Net debt to capital fell to
42 percent from 55 percent a year ago. It reported operating
income from supply chains of $670 million and set an annual
target of $1 billion for 2018-19.

Citing sources, Reuters reported this month that China's
state-owned Sinochem was in early talks to take an equity stake
in Noble. Noble subsequently said it was holding talks on a
possible strategic investment in the firm but did not give
details of the party it was involved with.

On Monday, Noble said it had no update to offer on its talks.

Reporting by Anshuman Daga

Feb 27, 2017

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