Find out why Noble is dead set on cost-saving measures

Here's how it can fatten its piggy bank.

According to OCBC, Noble aims to focus on cost savings. As Noble is a relatively complex group with numerous operations, management believes that there are inefficiencies that can be optimized or streamlined to save costs.  

Interest cost savings is another low hanging fruit that Noble can reap quite easily by refinancing its debt, given that the current rates are still lower than those on its outstanding debt.

Here's more from OCBC:

We also believe that the recent outlook upgrades by both Moody’s and S&P to stable bode well for its credit standing with investors.

While it is good that Noble has taken steps to improve its operations, we note that the medium-term macro picture continues to be quite challenging, especially for its Agricultural business.

Also a key takeaway was management’s focus on maintaining an “asset light” strategy with opportunistic capital recycling.

Noble does not have to fully own the up-stream asset as long as it can secure the supply with an “off-take” agreement with a minority stake.

Management cited the merger between Gloucester Coal and Yancoal Australia as an example.