Noble hit by losses of up to US$140m in Q2

But supply chains income could give it a pre-tax profit of US$50m.

Noble expects a net loss of US$115m to US$140m in Q2 due to restructuring expenses and net finance costs. Meanwhile, it expects profit before interest, tax, and restructuring expenses (PBIT) of approximately US$35m to US$50m as operating income from supply chains covered selling, administrative, and operating (SAO) expenses.

Whilst operating income from supply chains improved in the quarter, Noble said its performance in Q2 continued to be hit by the liquidity constraints the lack of “competitive trade finance” to support its operations.

Total group volumes (including both offtake and marketing) were slightly lower as the businesses focused on core flows. The realisation on its portfolio of long-term physical contracts was positive, with contributions from each of the Energy Coal, Carbon Steel Materials and Metals businesses.

Noble also said that Jamalco joint venture delivered a “strong performance” during the period with the impact of the higher alumina price environment reflected in the Q2 results.

Underlying SAO expenses were lower YoY, in line with Noble’s expectations. Further reductions in SAO expenses are expected with projected steady state annual SAO expenses of approximately US$100m.

Noble also expects to report restructuring expenses of $95m, which include fees associated with interim trade finance facilities, work fee for the ad hoc group, and a waiver fee for the holders of the senior unsecured revolving credit facility.

The company also expects net loss from its discontinued global oil liquids operations following the sale of Noble Americas Corp (NAC) on 12 January 2018.

Moreover, 86% of existing senior creditors have acceded to the restructuring support agreement (RSA). Major shareholders Noble Holdings, Goldilocks Investment Company, and the consortium including Value Partners Limited and Pinpoint Asset Management have also signed irrevocable undertakings to support the RSA – which combined comprise over 30% of total shareholdings.

“The company continues to engage with the SGX on the proposed restructuring and a circular to the company’s shareholders containing further information, together with a notice of a Special General Meeting, will be dispatched to shareholders in due course,” it said.

Separately, Noble indicated that it will not pay the coupons that are due on 30 July 2018 for the 6.75% US Dollar fixed rate senior notes due 2020.