Noble expects net loss of US$90-US$115 million for Q3, shares plunge

In yet another statement from the company bearing negative news, Noble Group said on Monday it is expecting a net loss of around US$100 million for the third quarter. The announcement prompted the stock to take another tumble down the rabbit hole.

The commodities trader warned in a filing on the Singapore Exchange (SGX) a possible net loss in the range of about US$90 million to US$115 million for the third quarter. The loss would be primarily driven by restructuring expenses, net finance costs, and losses from discontinued operations, Noble said.

The statement which was posted on the SGX after trading hours, sent its stock nose-diving lower. Noble shares fell 5.81% or S$0.005 to S$0.081 at 11am, Singapore time, only to claw back some of its losses slightly at 2pm, where the stock was down by S$0.004 or 4.65% to S$0.082.

Just days ago, Noble had posted in a filing on the SGX saying it had defaulted on notes that are due by 2020, and have already informed noteholders on the default. The announcement which was made on Friday night, sent its shares plummeting by around 13% the next trading day.

The group, which is currently undergoing a restructuring, has seen its stock falling 156% year-to-date. On January 2, 2018, the stock was trading at S$0.21.

Amidst the hard times, Noble said in the profit guidance statement it has positive underlying business results in the current strong global commodity price environment. Profit before interest, tax, and restructuring expenses for the third quarter is expected to be around US$20 to US$35 million.

“During the three months ended September 30, 2018, and to date, the group’s primary focus has been to agree and implement the restructuring. The board continues to strongly believe that the restructuring is in the best interests of all stakeholders,” Noble said.

Global commodity prices have been strong over the first nine months of 2018, supported by both a growth in demand and factors affecting supply such as production cuts and economic sanctions, the group added.

Operating income from supply chains were positive for the quarter, but the group’s performance continued to be impacted by the ongoing constraints on liquidity and the availability of competitive trade finance to support its operations. Restructuring expenses also posed a strain to the company’s earnings.

Noble assured investors saying that the constraints the company is facing are expected to be alleviated by the new trade finance facility once the restructuring completes.