Noble Group growth seems very artificial, volume is at any cost in order to compel name recognition.
A great deal of criticism should be levelled at Noble Group for their lack of financial substance.
How can any trader in the world have an Inventory-in-transit of $2.6M for a cost of goods sold of $48.524B ?
If we believed Noble, by its revenues, the Singapore-listed trader would be a trading giant second to Mercuria, (company with traceable flows and assets).
However the revenue per employee of Noble’s peers, only brings more questions about the veracity of Noble Group reported revenues and volume.
The revenues/employee of Mercuria and Gunvor put Noble Group in the 8–8.4B$ revenues fork.
At $101M per employee and the sales of Mercuria, Noble would have estimated $8B revenues.
At $4.9M per employee and the sales of Gunvor, Noble would be a $8.4B revenues company.
The audited inventory-in-transit, the level of RMI, and the peers analysis both place Noble as a company with implied revenues 11X to 12X less than the amount reported.
It is not clear how Noble can claim a turnover of nearly $100B per year with an unaudited physical traded volume of 182 million metric tons (2016) and 183 million metric tons (2015).
Noble is known very active in the financing market.
Noble Group has generated negative cash-flows from the operations to the tune of
-$900M in 2016,
-$600M in 2015
-$1600M in 2014.
Worse, the core of its booked net equity which is 102% of fair value gains/losses booked on assets.
How a company with no acceptable performance can still present a net positive equity of $3.92B ?
With $5B, Noble makes the top 4th position on the top 10 commodity borrowers list.
Cautionary tale: We need to know with some precision what Noble are actually using the money- for a “to-arrive net-equity” that the trader has to continuously re-finance.
The struggled acquisition of Noble Agri by Cofco has shown how difficult it is to impose success to a company’s assets with a substantial booked value despite no acceptable performance and very few financial substance (if not any of it).
Noble is known as remarkably active in the financing market but less in the commodity market.
These anomalies only reinforce our belief that Noble is not even close to one-fifth of the $97 billion sales company it touts to be.
The Noble Files 贵族档案