Noble shares plunge after $1.8 bn loss warning

Singapore (AFP) –


Shares in troubled commodities trader Noble Group plunged at much as 49 percent Thursday after it warned of a quarterly loss of up to $1.8 billion and announced further asset sales as the firm struggles for survival.

The company released a restructuring blueprint after the market close on Wednesday in which it warned investors of the massive net loss for the second quarter, with further cost-cutting seen to slash its headcount to 400 from 900 currently.

Noble, which is based in Hong Kong but listed in Singapore, posted a loss of $130 million in the first quarter.

It also announced Wednesday the sale of its US gas and power unit to rival Mercuria Energy America and its plans to exit from its oil liquids business.

The company said its priority in the next two years is to further reduce its debt.

Investors punished the stock Thursday, sending Noble shares tumbling by as much as 49 percent to 29.5 Singapore cents. It was trading 32.17 percent lower at 39 cents by mid-afternoon.

With Thursday's slump Noble shares have fallen 75 percent this year.

The stock was hammered in 2015 by a fall in commodities prices and it also suffered a credit rating downgrade. It had also faced allegations of irregular accounting practices.

The company has been selling assets and cutting costs to boost its finances and S&P Global Ratings had said that the firm's debt burden is unsustainable given its current earnings trajectory.

The restructuring leaves Noble to focus its businesses on hard commodities -- or those that are mined such as coal and metals -- as well as on freight and liquefied natural gas, with an eye on Asia.

"Going forward... the group will continue developing its strong domestic presence in Asian markets," it said, mentioning China, Indonesia and emerging Southeast Asia.

But it also warned that the commodities trading industry "will continue to face both challenging conditions and realignment as established participants face a low-margin trading environment".

Noble said it was bracing itself for "continuing stress in the sector".