Noble brings forward results to address criticism of accounting
Noble Group is bringing forward its second-quarter results as Asia’s largest commodity trading house seeks to address attacks on its accounting practices, following a 28 per cent fall in its share price last week.
Noble said on Monday that its results for the three months to June 30, plus the findings of a review of its accounting by PwC, would be published on August 10, three days earlier than planned.
There were double-digit declines in Noble’s share price on Thursday and Friday last week, with some industry insiders saying the falls bore the hallmark of a bear raid by short sellers.
The declines coincided with a two-week pre-results blackout period for Noble, which obliged it to halt a share buy-back programme under stock exchange rules.
Hong Kong-based Noble first came under fire in February when the then-unknown Iceberg Research strongly criticised its accounting.
Noble’s share price has fallen more than 60 per cent since then, hitting a six-year low of S$0.455 on Friday.
Singapore-listed Noble said on Monday that it believed “all the misleading and untruthful information which has been disseminated will be fully and positively resolved” by next Monday’s reports.
“Based on management accounts, our second-quarter performance is satisfactory, and we can also confirm that our business in the first month of [the third quarter] is ahead of our [second quarter].”
Noble, Asia’s largest trader of oil, metals and grains, also said it had “ample funds” available ahead of a $735m bond redemption due on Tuesday. The company would have more than $1bn in readily available cash after that payment, it said.
Shares in Noble rose as much as 8.8 per cent on Monday to S$0.495 after the latest announcement, but fell back to close up 3 per cent.
Noble has spent more than S$130m (US$95m) buying back stock in recent months. Richard Elman, a UK-born former scrap metal dealer who founded Noble and is its chairman, has also bought shares.
Noble announced last month that it was hiring PwC to review its “[mark to market] models, valuations and governance framework”.
The company has defended its accounting, but critics allege that it is providing a misleading picture of its financial performance. Iceberg has highlighted how since 2009 Noble has in aggregate reported much higher net profits than it has generated operating cash flow.
In order to book profits on long term commodity deals, Noble relies on its own market to market models to place a value on contracts.
Some analysts said there were still doubts over whether the company could reassure investors after its efforts of the past six months failed to stem the share price decline.
“Given the rapid decline in Noble’s market capitalisation, we believe a strategic investor may be needed to restore investors’ confidence in the name,” Colin Tan, analyst at Deutsche Bank, said.
Noble said it has been approached by a number of parties that might be interested in investing in the company, though it could not guarantee if a transaction would be done.
The change of date for Noble’s results means they will come out at the end of a long holiday weekend in Singapore, as the city-state celebrates its 50th anniversary. Both August 7 and 10 are public holidays.