Noble Group shares down 23% in wake of profit warning

Shares in Noble Group have lost almost half their value this week following the commodity trader’s warning that it might not be profitable until 2019.

The company’s stock was down 23.4 per cent during afternoon trade on Friday in Singapore to S$0.67, the lowest level since late 2002. During the morning session, it had been down as much as 30.3 per cent.

This followed a 32.4 per cent drop in the previous session when investors had the first chance to react to a first-quarter profit warning that was delivered late on Tuesday. The Singapore market was shut for a public holiday on Wednesday.

Noble on Thursday also revealed Paul Brough, a former partner at accounting firm KPMG, would replace founder Richard Elman as chairman and lead a strategic review.

The company said in its profit update it expected to post a $130m in the first quarter owing to a “challenging” operating environment that had been exacerbated by what it labelled a “dislocation” in coal markets.

Noble has been trying to turn itself around after two difficult years in which its accounting practices were questioned and shares have fallen by more than 90 per cent. The company has sold a number of assets and tapped shareholders for cash in an effort to strengthen its balance sheet.

Shares are down 47.2 per cent this week. The price of company’s bonds, maturing in 2022, have almost halved this week, to $55.103 from $97.708 last Friday. At one point today, the bond price was as low as $42.166.

(Chart courtesy of Bloomberg)