Noble holds early results after accounting attacks

Aug 04, 2015
<p><span>Supply chain firm brings forward call to allay investor fears about accounting practices</span></p>

Noble Group, one of Asia’s largest supply chain firms and commodity trading houses, is set to hold its second-quarter results call ahead of schedule, as the group responds to criticisms of its accounting practices.

The group’s IR team will be publishing its three-month results – up to June 30 – plus the findings of a recent PwC review of Noble’s accounting practices on August 10, three days earlier than previously planned.

Last week, Noble’s stock price tumbled by 28 percent, with double-digit drops on Thursday and Friday. These declines occurred at the same time as Noble’s usual two-week pre-results blackout period, also forcing the company to halt its buyback program.

Though PwC is now reviewing Noble’s ‘models, valuations and governance framework’, according to the company’s website, the commodities trader has been criticized for giving a biased view of its financials for some time. In February Iceberg Research, a social research consultancy, strongly criticized Noble’s accounting practices and highlighted how the Hong Kong firm has reported far higher aggregate net profits than it has generated operating cash flow.

A statement from Noble’s board of directors says there is no evidence of any ‘financial or material business issues’ that would have caused the company’s stock price drop and subsequent volatility, though it suggests that ‘misleading information’ being spread about the company may be an external attempt to manipulate share prices.

‘The board believes all the misleading and untruthful information that has been disseminated will be fully and positively resolved by the publication of the company’s Q2 results presentation, by the results of the previously announced PwC independent assurance report in connection with the carrying value of long-term physical commodity contracts, and by our previously announced forthcoming investor day,’ the statement continues.

Noble has further announced that it has received proposals for ‘potential financings and strategic and/or investment options’, though it has not yet confirmed whether any such deals will be done at this stage.

Noble has been a fixture at the IR Magazine Awards in Asia in recent years. In 2011 the company won the South East Asia award for best investor relations for a corporate transaction, following its acquisition of an additional stake in Australia-based Territory Resources in June 2011.

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