Noble Group Ltd. reported a quarterly loss that pummeled its shares by a record 33 percent, stoking worries the Singapore-listed commodity trader was failing to recover from a crisis-wracked two years despite a deep restructuring, Reuters reports.
Founder Richard Elman, 77, said on Thursday he was stepping down as executive chairman to take on a non-executive board role as chairman emeritus. Board member Paul Brough, a former senior partner at KPMG, becomes executive chairman with immediate effect, and would lead a strategic review.
Elman, who founded the company in 1986 and took advantage of a commodities bull run to build it into one of the world’s biggest traders, said it was time for him to pass on the baton as Noble’s “lower-cost and much more focused platforms have started to take shape.”
“We have told people repeatedly, and I repeat it here, that this undertaking will not be some superficial overnight Botox fill-and-smile. Rather it will be a long, hard slog with ups and downs along the way, until we regain profitability, a goal that we are most likely to achieve in FY 2018/19,” Elman said.
The loss deals a blow to its efforts to rebuild investor confidence after setbacks that have included a questioning of its accounts by Iceberg Research and a commodities downturn that triggered a share price collapse, credit rating downgrades as well as a series of writedowns, asset sales and fund raising.
Noble issued a profit warning on Tuesday, citing a “dislocation in coal markets”. It reported a loss of US$129.3 million for January-March versus a profit of US$40.5 million a year ago.
“The two concerns at this stage are liquidity and profitability. They addressed the liquidity issue to some extent last year with the sale of its North American unit and the rights issue and this year with its bond sale,” Danny Huang, credit analyst at S&P Global Ratings, said ahead of the results.
“It is largely the profitability that they need to address, liquidity is a lesser concern. We also need to see improvements in the operating cash flows.”
Noble’s market value has shrunk to about US$820 million from about $6 billion in February 2015.
During its results call, Noble was repeatedly asked by analysts on its liquidity and debt levels, but company executives downplayed any concerns.
“The group continues to be in discussions with banks on a broader financing strategy to ensure that the facilities provide the liquidity required and support the structure of Noble’s business going forward,” it said.
Noble’s CFO Paul Jackaman told analysts the firm was still holding conversations with strategic investors but he declined to comment on Sinochem.
Reuters reported in February that Noble was in talks with China’s state-owned Sinochem for an equity investment. Noble subsequently said it was holding talks on a possible strategic investment, but did not name the company.
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