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Noble Group reports first annual loss in nearly 20 years

The commodities trader posted a net loss of US$1.67 billion for 2015, hurt by writedowns in the value of its assets and losses on the sale of its agricultural arm. 

SINGAPORE: Singapore-listed commodities trader Noble Group reported a net loss of US$1.67 billion (S$2.34 billion) for 2015 on Thursday (Feb 25), a sharp reversal of its net profit of US$132 million for the year before.

It was the company's first annual loss in almost two decades. 

The Singapore-listed firm had warned of this earlier on Tuesday, and also revealed that it would be posting a loss of US$1.2 billion of non-cash reserves and exceptional losses in the fourth quarter, excluding the loss on the sale of Noble Agri, largely on account of "lower for longer" coal price assumptions. 

Operating income from supply chains, at US$1.18 billion, was also down year-on-year, largely on account of a swing to a loss in the mining and metals segment, the trader said. 

However, the company posted stronger cash flow of US$651 million in the second half of 2015, with a record US$1.95 billion in cash at year-end. 

The strong cash generation was underpinned by record performance in the energy sector, Noble said. 

Leading energy franchises in oil liquids, coal, gas and power generated a record US$1.3 billion in operating income, it said. 

In addition, the Hong Kong-based firm said it measured its performance by its profit from underlying businesses, which was US$244 million in 2015, while excluding the substantial non-cash reserves and exceptional losses. 

Noble's chief executive officer, Yusuf Alireza, said the company had "advanced our key strategic objectives over the last three years despite a very difficult external environment".

"The disposal of assets and businesses, the reduction in debt and our move to diversify away from the industrial bulk commodities, building consumer facing businesses in gasoline and power in new geographies, has borne fruit - as reflected by the fact that our four energy businesses have generated combined record operating earnings at US$1.3 billion in 2015,” he added.

Noble Group shares closed at S$0.34 on Thursday.