ENERGY & OFFSHORE | Staff Reporter, Singapore

Noble losses narrowed to US$128.34m in Q2

Revenue was still down due to lower group volumes.

The embattled Noble Group has had its losses narrowed down by 93% to US$128.34m in the second quarter of 2018. For the first half of the year, losses also shrunk by 89% to US$199.89m.

According to its financial statement, Q2 revenue fell by 29% to US$1.17b whilst H1 revenue crashed by 35% to US$2.33b. Total group volumes (including both offtake and marketing) for Q2 dipped 5% QoQ due to the poor performance of its hard commodities businesses, whilst volumes for H1 fell by 23% YoY as the businesses focused on their core flows.

Also read: Noble hit by losses of up to US$140m in Q2

For Q2, Noble’s metals, minerals, and ores segment recovered from a US$14m loss to US$54m profit, whilst volumes fell 22% to 9.6 million tonnes. The Jamalco joint venture delivered a strong performance thanks to higher alumina price environment. The segment also benefited from higher profitability from the special ores and alloys business and steady volumes from the base metals business.

Noble noted that its energy coal and metallurgical coal and coke businesses continued to execute on their contracted flows and generated positive realisation but are still hit by ongoing liquidity constraints and the lack of funds. In H1, energy coal volumes fell 36% to 5.3 million tonnes.

Operating income from supply chains was US$26m, despite US$65m of net non-cash losses from contract-specific performance reserves against certain net fair value gains on commodity contracts and derivative financial instruments.

Noble also shouldered restructuring expenses (US$114m) for its interim trade finance facilities, a work fee for the restructuring ad hoc group, and a waiver fee for the holders of its senior unsecured revolving credit facility.

Net finance costs of US$126m primarily comprise accrued interest on existing senior debt. “In accordance with the RSA signed on 14 March 2018, the group has ceased to make, but continues to accrue, interest on its existing senior debt,” Noble added.

Noble completed the sale of Noble Americas Corporation (NAC) and the wind-down of certain remaining Global Oil Liquids working capital balances within Noble Clean Fuels Limited (NCFL), which concluded the asset disposal programme.

Moreover, over 86% of Noble’s senior creditors have acceded to the restructuring support agreement (RSA). Goldilocks Investment Company also previously backed the RSA, which means the holders of over 30% of Noble’s capital now support the agreement.

Noble will also hold a special general meeting (SGM) on 27 August to approve the company’s restructuring plan and vessel sales. 

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