SINGAPORE Noble Group Ltd reported a quarterly loss that pummelled its shares by a record 33 percent, stoking worries the Singapore-listed commodity trader was failing to recover from a crisis-wracked two years despite a deep restructuring.
As expected, founder Richard Elman, 77, said on Thursday he was stepping down as executive chairman and taking on a non-executive board role as chairman emeritus. Board member Paul Brough, a former senior partner of KPMG, becomes executive chairman with immediate effect.
Elman, who founded the company in 1986 and took advantage of a commodities bull run to build it into a leading world trader, said it was time for him to pass on the baton as Noble's "lower-cost and much more focused platforms have started to take shape".
The company issued a profit warning on Tuesday, citing a "dislocation in coal markets". It reported a loss of $129 million for January-March versus a profit of $40 million a year ago.
The loss deals a blow to Noble's efforts to rebuild investor confidence after setbacks that have included a questioning of its accounts by Iceberg Research and a commodities downturn that triggered a share price collapse, credit rating downgrades as well as a series of writedowns, asset sales and fund raising.
"The two concerns at this stage are liquidity and profitability. They addressed the liquidity issue to some extent last year with the sale of its North American unit and the rights issue and this year with its bond sale," Danny Huang, credit analyst at S&P Global Ratings, said ahead of the results.
"It is largely the profitability that they need to address, liquidity is a lesser concern. We also need to see improvements in the operating cash flows."
Noble, which has stood by its accounts, appointed two new co-CEOs last year after its CEO quit. But the company's shares have crashed by around 90 percent from mid-February 2015 when Iceberg first issued its report.
Noble's market value has shrunk to about $820 million from about $6 billion since February 2015.
"The dislocation in coal markets, and the very thin trading liquidity witnessed in the respective hedging instruments, was detrimental to the short term – 12 week - outturn," Hong Kong-headquartered Noble said in its results statement.
"Additionally, higher oil prices in the period absorbed working capital and also hurt profitability as we continued to preserve liquidity," it said.
The net loss was Noble's weakest result in more than two years, excluding the October-December quarter in 2015 when it took a writedown of over a billion dollars.
Noble, whose top shareholders include Elman and sovereign wealth fund China Investment Corp, is now mainly focused on oil liquids and energy coal businesses.
Noble's shares fell as much as 33 percent to S$0.865, the lowest since December 2002. The company undertook a 10 for 1 share consolidation last month to avoid penny stock status.
Over the past two years, the company has cut debt and taken steps to improve liquidity.
(Reporting by Anshuman Daga; Additional reporting by Umesh Desai in HONG KONG and Aradhana Aravindan in SINGAPORE; Editing by Randy Fabi and David Evans)