Noble Group racks up $1.6b in losses for third quarter
Troubled commodity trader Noble Group looks to be drowning in red ink after the firm racked up a huge loss of US$1.2 billion (S$1.6 billion) for the third quarter.
That brought its losses for the nine months of this financial year to an eye-watering US$3.05 billion.
Noble's disastrous 2017 can be seen in comparison with the last financial year when its third-quarter loss was just US$28.1 million while the nine-month deficit was a relatively paltry US$42.5 million.
Revenue for the third quarter fell 18 per cent to US$1.46 billion from US$1.79 billion a year ago.
The third-quarter hit was due mainly to impairments from asset sales and provisions, the Hong Kong-based trader said yesterday.
It added that the challenging operating environment affected its showing for the quarter.
This disrupted costs and prevented it from taking advantage of profitable trading opportunities, with volumes dropping 26 per cent year on year.
The firm slashed its business in the third quarter, selling assets and continuing to tackle debt.
It also aims to cut staff to 400 from over 1,000 at the end of last year.
"As we dispose of further assets, we may incur additional non-cash losses," said chairman Paul Brough at an earnings briefing yesterday.
Mr Brough was reluctant to give a timeline for the sale of certain assets, a move that could raise another US$800m to US$1b, as it could "prejudice discussions".
He said the firm was "obviously aware of the impending debt obligations and deadlines".
These assets are primarily outside North America and are not in Asia either, but involve "fairly chunky" ones like its aluminium operations.
Net debt decreased by US$112m from the end of June to $3.7b in the third quarter.
But it rose by US$833m over the nine months, primarily driven by negative cash flow from underlying activities due to the challenging operating environment and its re-investment in Harbour Energy in January.