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Posts Tagged ‘Noble Group’

Noble Bahru: an update

In China, Commodities on 11/10/2016 at 10:11 am

Taz it now

Circa 2008

Image result for alsagoff mansion

Still shares have cheonged in recent months from S$0.11 cents to S$0.20 (now at 0.19)

For the half yr to end Junereported negative operating cash flow of $570m and a net loss of $14m. Its adjusted net debt, which counts inventories of oil and coal as cash, ballooned to US$2.4bn, more than its mkt cap, though the proceeds (US$800m ++) the recent sale (a crown jewel) should reduce the real net debt (excluding the inventories) by around 20%.

And if its accounting is to believed its NTA is around S$0.60 versus a mkt price of S$0.20.

Still an avoid as Noble Bahru has nothing to do with the old biz model of the Noble House.

 

Iceberg crushes Noble House into dust

In Accounting, Commodities, Corporate governance on 07/06/2016 at 1:17 pm

I’ve been thinking of buying Noble House but am still concerned that the accounting issues surrounding the long-term supply contracts could resurface, They’ve not gone away. Maybe the rights issue prospectus can help.

As a reader commented on FT

The only winner in this mess is Iceberg. They nailed it 18 months ago. They were right. They still are right. Their analysis was excellent and everyone who lost money, and that was everyone should be kicking themselves for not heeding their advice.

Btw, the reader remains sceptical that the underwriters will do due diligence on the accouting issues. I suspect he’s right.

Under the just departed CEO, Noble made small investments in commodity producers to secure marketing and supply rights, in some cases for as long as 20 years.

Noble’s  team of quantitative analysts designed structured trades and business models involving long-term commodity contracts.

Critics have said the company booked profits upfront on some of the contracts, which were based on overly optimistic assumptions about commodity prices. Noble has defended its accounting policies, and board-appointed consultants PricewaterhouseCoopers found it had complied with international accounting rules. Err so did Enron, Global Crossing etc. Their accounts were approved by the big four accounting forms, one of which is Pricewaterhouse.

Noble House sends cryptical message?

In Accounting, Commodities, Corporate governance on 01/06/2016 at 12:12 pm

Noble’s board said that it looks forward to working with Alireza in future “should the opportunity arise”.

Hmm this could be boiler-plate PT to signal that the parting was really amicable. but maybe he left because he wants to do a LBO? Ot because he wants to buy from Noble the investments in commodity producers that he made as CEO and which caused all sorts of accounting problems for Noble?

Stock seems to have strong support at the 0,29 level. Hope its “outside” buying. I’m putting the stock on my “Punt?” list.

May want to read this

Here’s Why Noble Group Shares Are Plunging

More cracks in Noble Hse’s foundations

In China, Commodities, Corporate governance on 05/02/2016 at 3:23 pm

Look’s like the Yr of the Monkey (starting on Monday) is not going to be good for Noble. I had posted that Monkey, the trickster, could be gd news for the trader.

Two things just went wrong and the effects will be felt in the new year especially as it is trying to refinance almost US$2.2bn of debt bank with bankers concerned about more asset write-offs in the light of a US$300m write-off.

And these two events make it harder has to find a strategic investor to help srengthsn its balance sheet.

First, Nyrstar, the world’s largest producer of zinc, is ending its agreement to supply Noble Group one year early. This deals another a blow to the embattled commodities trader.

And S&P has downgraded fellow trader’s Glencore’s debt to one notch above junk. Noble followed Glencore into morphing from a trader to becoming a mining trader.

Double confirm” Noble Houses’s acoounting is ignoble

In China, Commodities, Corporate governance on 03/02/2016 at 6:20 am

The planned sale of Noble Agri to China National Cereals, Oils and Foodstuffs Corporation for US$750 million was backed by 90% of shareholders who voted at a special meeting in Singapore, last week.

But this means a U$500m writedown on the US$1.3bn valuation ascribed to the Noble Agri stake in Noble’s accounts: seemingly vindicating claims that its accounting is very aggresive. :

Well we’ll soon know what banks think about Noble’s accounting as it’s in talks about refinancing its credit lines. Banks have been pretty accomodative so far but this write-off is worrying them about other potential write-offs in asset values.

It’s online deractor says its claims of malpractice by Noble have been vindicated. Iceberg Research has claimed the company inflated asset values and booked profits on deals long before receiving any cash from the transactions. Mgt rubbished the claims, even getting an int’l accounting firm, PwC (I think) to say its latter practice was halal (kosher).

Noble’s luck will turn in the Monkey yr?

In Accounting, China, Commodities, Corporate governance on 15/01/2016 at 5:11 am

The Noble House, already under pressure in a weak commodities market when blogger Iceberg Research alleged in Feb last yr that the company was inflating its assets by billions of dollars by not fairly representing the value of its commodity contracts. The company has rejected the claims. And gor PWC to bless its methodology forgetting that int’l accounting firms have reputations juz better (slightly) than tabloid journalists and second-hand car salesmen.

But until now, the bad news never stopped despite the effirts of the CEO and the share-buying chairman and founder. Fitch Ratings affirmed Noble Group’s BBB-minus rating with a stable outlook yesterday (Jan 14), remaining the only agency to assign this nvestment-grade rating on Asia’s biggest commodities trader.

Fitch said the decision followed Noble’s improved balance sheet and sufficient liquidity position following its stake sale in Noble Agri, its pledge to cut working capital needs for its metals unit, and continued cash flow generation from its operations,

Both S&P and Moody’s had cut Noble’s rating to junk, sending its bonds and stocks tumbling. Its stock is trading at the lowest since October 2008.

Its credit default swaps contracts trade on an upfront basis (Pay before you bet, credit not allowed) and its CDS curve is inverted, an indication investors consider it a stressed credit. All this makes its bankers keep their fingers on the recall button. For Noble, no credit, no play.

But new yr, new luck? And the yr of the Monkey is coming on 8 Feb. Should be a gd yr for traders.

Maybe by the end of the yr of the monkey the chairman who has been buying shares will have the last laugh. As will the CEO. But then in the Chinese paneheon of deities, the Monkey King is the trickster. So who knows? Ask Buddha, the only deity who can defeat him.

Nmm. I’ll go to the Chinese temple on Tembling Road on Feb 8 and toss the fortune stocks on whether to buy Noble.

Opdate at 6.45am: Maybe it should try to refinance its borrowings early. Glencore juz did this to show its banks are onboard.

A stock to watch.

Noble House looking for new sucker?

In China, Commodities on 14/10/2015 at 1:19 pm

FT reported gossip during LME Week* in London that Noble could be close to a deal with a strategic investor.

It’s controlling shareholder is a Chinese SOE

——

*The biggest annual gathering of the metals and mining industry

Noble House: Funny this

In China, Commodities, Corporate governance, Emerging markets on 08/10/2015 at 1:38 pm

Noble House is HQed in HK, and listed in S’pore. But its new head of internal audit is based in Stamford, Connecticut in the US: huh? Given all the problems it is facing especially concerns about its accounting practices, I find it strange that the chief internal auditor is not based in its HQ, but a long way away.

The guy has good credentials as an internal audit manager but given that he’s based a lo9ng way from HQ, how is he going to manage his team? If he is employed more for his analytical skills rather than as as a hands-on mgr, why not appoint him as an adviser to the audit committee and the CEO.

Background

Noble has appointed a new head of internal audit. In an email Noble Group CEO Yusuf Alireza said Mr Frank Russo will take charge with effect from Monday (Oct 5).

Mr Russo will be based in Stamford, Connecticut in the US and he will report directly to Mr Alireza and the audit committee.

Mr Russo was previously at GE Capital, where he served as managing director and head of audit for the Energy, Aviation and Insurance businesses. Prior to GE, he spent over eight years at Deloitte and Touche as a senior advisor for Governance, Regulatory and Risk Strategy.

Noble House: More empty rooms

In Accounting, China, Commodities on 04/10/2015 at 2:15 pm

Oct 2 Noble Group’s global head of M&A has resigned from the company, marking a string of recent senior level departures at the commodities trader as it battles weak prices of resources, people familiar with the matter said on Friday …

On Thursday, Reuters quoted sources as saying that two senior U.S.-based energy executives had left Noble in the past week.

Noble hit the spotlight in February when blogger Iceberg Research questioned its accounting practices. Noble defended its financials, and board-appointed consultant PricewaterhouseCoopers found no wrongdoing in a report published in August.

http://www.reuters.com/article/2015/10/02/noble-group-executives-departure-idUSL3N12217L20151002

Not a good day to be averaging down on Monday.

PwC’s less than Noble disclaimer

In Accounting, China, Commodities, Energy on 11/08/2015 at 1:29 pm

FT’s Alphaville drew attention to PwC’s disclaimer: PwC said Noble records profits on long-term sales and marketing deals in a manner consistent with industry practice

So if it turns out that “There may be a fundamental difference between a company following the rules and a company presenting a true picture of its financial position,” (Andrew Fastow, the infamous treasurer of the even more infamous Enron, to a FT conference), PwC is not liable. https://atans1.wordpress.com/2015/07/03/noble-house-airasia-ceos-spin-meisters-take-note/

No wonder PwC is a “professional services firm” where the oldest profession is prostitution.

Forgotten the issues, here’s Michael Dee’s letter to employees: http://www.sharesinv.com/articles/2015/05/29/open-leter-noble/?utm_source=email?

He was at the very least right right that their jobs were at stake.”Noble said it was targeting a 16 per cent reduction it its global workforce to just over 1,500 people by the end of the year.” reports the FT.

Noble House plays noble move

In China, Commodities on 05/08/2015 at 1:07 pm

It seemed like shooting fish in a barrel for hedgies. Short Noble during the period when it or senior executives could buy shares. Worked for a bit until the Noble House shafted them well and trul: shorts have to be covered as the price shoots up two days in a row.

Noble came out on Monday to say it
— had received proposals for “potential financings, and strategic and/or investment options”;
— has ample cash and liquidity to meet its obligations and operate its busines It can fund the US$735 million bond redemption due Aug 4, and will still have readily available cash of well over US$1 billion. It also said it has US$15 billion in bank lines.); and
— would bring forward the publication of its second-quarter results and the report by PwC on its accounting practices to Aug 10.

This super long holiday weekend will allow the hedgies to drown their sorrows.

Noble House, AirAsia, CEOs, spin meisters take note

In Accounting, Airlines, Commodities, Financial competency, Logistics on 03/07/2015 at 1:25 pm

My eyes rolled when I read the CEOs of above two cos recently said that their cos follow the accounting rules. (Remember, credible doubts have arisen over whether their accouting reflects their financial position.)

The best riposte to “We follow the accouting rules” came recently when an ex-convict recently addressed a FT conference.

“There may be a fundamental difference between a company following the rules and a company presenting a true picture of its financial position,” said Andrew Fastow, the infamous treasurer of the even more infamous Enron, to a FT conference.

Or as he puts in another way, that it’s possible for a company to comply with accounting standards while at the same time painting a misleading picture of its real financials.

I tot it tragically funny when he said he went to prison partly for doing things that got him a best CFO award: innovative off-book entities.

 

 

Run on the Noble House?

In Accounting, Commodities on 10/06/2015 at 10:46 am

Sometime back I wrote

Noble said it had secured US$2.25bn of commitments for a new credit facility.

It retains the confidence of its lenders, giving them enough info to keep them lending. The problem for investors is that we small investors will be the last to know when banks cut credit lines.

https://atans1.wordpress.com/2015/05/06/noble-what-matters/

From FT

The $2.3bn revolving credit facility has also come under scrutiny from analysts and traders after at least three tranches of the three-year loan were offered to other banks in the secondary market.

“”It could indicate the banks may be losing some confidence in the company,” said Wei Bin, analyst at Maybank Kim Eng in Singapore.

A hedge fund manager said the latest sell-off was notable because it was accompanied by large daily trading volumes.

“It is now trading in such volume it appears some of the major shareholders are changing their view on the stock,” said Robert Medd at GMT Research, an independent research firm. GMT has published several reports critical of Noble.

Phew glad I wasn’t tempted: https://atans1.wordpress.com/2015/05/14/noble-why-im-not-tempted/

 

Noble: Why I’m not tempted

In Accounting, China, Commodities, Corporate governance on 14/05/2015 at 1:31 pm

Many of Noble’s operations and investments are exposed to the slowdown in China.

And the Chinese economy is still slowing. And the engine of growth is no longer exports or infrastructure spending  or construction. It’s the service sector.

Maybe when I hear that Noble is starting to shipping Pinoy gals to China as wives for barren branches, will I buy the stock.

Noble: What matters

In Commodities on 06/05/2015 at 1:23 pm

Noble said it had secured US$2.25bn of commitments for a new credit facility.

It retains the confidence of its lenders, giving them enough info to keep them lending. The problem for investors is that we small investors will be the last to know when banks cut credit lines.

Noble CEO gets it, ministers don’t?/ Noble a Buy?

In Accounting, Political governance on 20/03/2015 at 12:12 pm

“We unfortunately live in world where knowing that you run your business professionally is not enough,” the CEO of Noble wrote in a letter to stakeholders in February. “You must be able to prove it.”

But will he walk the talk? Two big funds* think so and have been buying. Maybe they have been assured on the following?

[A] chunk of the profits Noble reports comes from non-cash gains created by “marking to market” long-term contracts (eg, to supply coal) and derivatives it holds. Iceberg is not accusing Noble of fraud, but it is questioning how realistic these valuations are and asking how much of the company’s reported profits are the result of this practice. Noble reported that at the end of 2014 the net fair value of these positions was $4.6 billion, equivalent to 91% of its book value.

It is hard to tell from what Noble discloses in its accounts whether its valuations are indeed fair; and since it is also unclear how much of its profits come from such changes in valuation, it is difficult to assess how robust its profits are. Noble did not respond to requests from The Economist for comment. The firm’s cashflow has been weak. Over the past three years it has booked net profits of almost $1 billion but negative cashflow of almost $2 billion, after working-capital, capital-investment and interest costs.

On March 5th it issued an 11-page rebuttal, suggesting that a disgruntled ex-employee was behind Iceberg. It also gave more detail about the “fair value” positions. They reflect over 12,000 individual contracts, almost half of which mature within two years. Over the past three years the firm has realised $800m of cash from such positions. Yet the rebuttal omitted a vital piece of information: how much profit has been booked from these positions. Without this nugget it is hard to form a sensible judgment about Noble’s books or health.

Emphasis mine

http://www.economist.com/news/business/21646233-big-asian-commodity-trader-attacked-anonymous-online-critic-nobbled

*A unit of insurer Prudential, and Invesco increased their stakes in the company. [Added at 1.40pm]

Noble Gp: “Cheong all the way” Maybank

In China, Commodities on 11/01/2013 at 5:39 am

But if China doesn’t perform, you’re in trouble.

S’pore Biz Review

It was annced yesterday that China’s commodities imports accelerated in 2012 in volume terms in spite of slowing growth in the overall economy, with crude oil, iron ore and copper reporting record high imports for 2012.

Now this is accountability

In Commodities, Corporate governance, Logistics on 11/11/2011 at 5:56 am

Commodities supply chain manager Noble Group (based in HK but listed here) announced on Wednesday the resignation of its chief executive only hours after reporting a surprise US$17.5-million (S$22.5-million) net loss in the third quarter from a net profit a year earlier. It blamed volatile market conditions and mark-to-market losses.

CEO Ricardo Leiman will remain as an adviser to the group after resigning “for personal reasons”, Noble said.

Chairman Richard Elman was appointed acting CEO, “We are taking this opportunity … to realign our goals and strategies to adapt to the many challenges that exist in the prevailing market conditions … It goes without saying that we are very unhappy with this performance even if it does just cover a very short period … things happen’ which are out of our control … remains very healthy and strong”.