Noble Group Records Small 2016 Profit

 

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 decades.

 

"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 Monday.

 

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.