* Richard Elman to become chairman emeritus
* Company says still in talks with strategic investors
* Shares fall up to 33 pct to lowest in more than 14 years
* Decline in shares is biggest on record
(Adds founder's comments in paragraph 4, results details)
By Anshuman Daga
SINGAPORE, May 11 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 previously flagged, founder Richard Elman, 77, said on
Thursday he was stepping down as executive chairman to take on a
non-executive board role as chairman emeritus. Board member Paul
Brough, a former senior partner at KPMG, becomes executive
chairman with immediate effect, and would lead a strategic
Elman, who founded the company in 1986 and took advantage of
a commodities bull run to build it into one of the world's
biggest traders, 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."
"We have told people repeatedly, and I repeat it here, that
this undertaking will not be some superficial overnight Botox
fill-and-smile. Rather it will be a long, hard slog with ups and
downs along the way, until we regain profitability, a goal that
we are most likely to achieve in FY 2018/19," Elman said.
The loss deals a blow to its 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.
Noble issued a profit warning on Tuesday, citing a
"dislocation in coal markets". It reported a loss of $129.3
million for January-March versus a profit of $40.5 million a
"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."
SHRINKING MARKET VALUE
Noble's market value has shrunk to about $820 million from
about $6 billion in February 2015.
During its results call, Noble was repeatedly asked by
analysts on its liquidity and debt levels, but company
executives downplayed any concerns.
"The group continues to be in discussions with banks on a
broader financing strategy to ensure that the facilities provide
the liquidity required and support the structure of Noble's
business going forward," it said.
Noble's CFO Paul Jackaman told analysts the firm was still
holding conversations with strategic investors but he declined
to comment on Sinochem.
Reuters reported in February that Noble was in talks with
China's state-owned Sinochem for an equity investment. Noble
subsequently said it was holding talks on a possible strategic
investment, but did not name the company.
Noble said its net debt to capital stood at 46 percent as of
March 31, in line with the group's stated leverage target of
between 45 and 50 percent.
Noble, which has stood by its accounts, appointed two new
co-CEOs last year after its CEO quit. But its shares have
crashed by around 90 percent from mid-February 2015 when Iceberg
first issued its report.
"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," the Hong
Kong-headquartered company said.
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.
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.
(Reporting by Anshuman Daga; Additional reporting by Umesh
Desai in HONG KONG and Aradhana Aravindan in SINGAPORE; Editing
by Randy Fabi and David Evans)