Commodity trader Noble Group has gone through a steep downturn in the past three years, and meanwhile, the number of ships and employees at subsidiary Noble Chartering has been reduced significantly.
But even though Singapore-based Noble Group is currently struggling to settle a comprehensive restructuring at a time when the founder and majority shareholder has pulled out, and while the parent company has been hit by several lawsuits, the dry bulk business itself is running "normally," Noble Chartering CEO Michael Nagler tells ShippingWatch.
Many people think that Noble was forced to sell these vessels, but I can say that this is not the case"
"There are of course some parties with whom we haven't done business before, who have asked about it, but we would say that our dry bulk business is running normally," says Nagler.
According to Nagler, Noble Chartering's cash flow has "been normal, everything has been paid, and there has been full performance all the way through."
50-75 ships going forward
Since Nagler took the reins of Noble Chartering in 2014, the business has changed significantly. This is reflected in the number of employees as well as the number of ships in operation.
"Previously there was a lot of focus on volume at Noble Chartering, which meant that there were 250 vessels when I began four years ago. To us it's not a matter of volume today, but rather of being profitable, and in having a fleet of 50-75 ships, we're big enough. That will be the level going forward," says Nagler.
When he arrived, the dry bulk business had 106 employees.
"Today we're 22 people at Noble Chartering, and there's a limit to how many ships we can handle with that number," he says.
Nagler declines to comment on the restructuring process surrounding Noble Group. As CEO of Noble Chartering, he is not part of the group working on the restructuring, he explains.
However, he stresses to ShippingWatch that he views Noble Chartering as part of the continuing business, and that he is confident that the company will continue.
He also rejects the notion that the parent company's efforts to settle debt plays a part in terms of the ships that have been sold.
"Many people think that Noble was forced to sell these vessels, but I can say that this is not the case," says Nagler.
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The sales of ships and expired charter contracts mean that Noble Chartering currently operates a fleet of 57 vessels, of which 16 are owned. That is more than 50 percent less than when ShippingWatch last spoke to Nagler, a little over a year ago in the spring of 2017. Back then the operated fleet counted almost 120 ships, of which 22 were owned.
In addition to the owned fleet, Noble charters vessels in Japan and Greece, while the company also had significant activity in Copenhagen last year, says the CEO.
Since August the company has signed two Japanese newbuilds, set for delivery in 2020, on seven-year charter contracts with options to purchase the ships.
And the sales of ships will continue, says Nagler. A Kamsarmax ship was sold for USD 24 million, while Noble Chartering is in the process of selling another ship, also for USD 24 million.
The plan for us is to be ultra asset light, so we don't have to be a shipowner, though it's not a goal to completely divest all owned ships"
"We'll probably sell two or three more ships. The plan is to sell another two Kamsarmax vessels, and then it depends on how the market develops. But if the market continues to improve, we may sell one or two more vessels," he says, adding that this is a "very good" time to sell:
"The plan for us is to be ultra asset light, so we don't have to be a shipowner, though it's not a goal to completely divest all owned ships. We'd rather charter, and as we've taken two newbuilds on charter, we've sold two ships."
New Copenhagen office and technical management
While the scope of employees and ships has been trimmed at Noble Chartering, a company focused on technical management has been established, Nagler tells ShippingWatch.
Noble Chartering previously had its vessels placed with external ship managers. But with new company Omega, Noble has created its own team, opened an office in India and hired people in Singapore. The plan is to expand the activities over time, so that the company can also service third-party shipowners.
"The ships we own have been moved to Omega, as we can do it cheaper and more transparent there," he tells ShippingWatch.
Why didn't you do this earlier, if you note that it's cheaper?
"We didn't have the employees for it, and the former management at Noble Chartering did not share this view. This was not the first point on my agenda when I began in 2014. At the time we were 106 employees, so the entire restructuring of the chartering business has taken time, and only now have we found the time to focus on technical management and to bring in the right people," says Nagler.
He explains that the new focus is among the reasons that Noble Chartering in June last year established an office in Copenhagen, under the name Atlantic Chartering Service.
The company is looking to enter dialogs with shipowner concerning technical fleet management.
English Edit: Daniel Logan Berg-Munch