Hong Kong Forex retail forex broker KVB Kunlun Financial Group Ltd (HKG:8077) has issued a statement warning investors that its full year 2016 results will show a significant decrease in net profit by
over 50%, as compared to 2015.
KVB already issued a profit warning for the third quarter of 2016, which saw a 20% drop in Revenues at KVB. Which itself was not very impressive, given that in Q2 KVB saw Revenues dive by 21%, and profits fall 61%.
KVB is blaming its poor results on:
- the decrease in leveraged foreign exchange and other trading income as a result of decreased market volatility;
- the decrease in cash dealing income which was mainly attributable to a decline in trading volume in cash dealing business; and
- the increase in fee and commission expenses paid to service providers.
KVB will provide its full year 2016 financial results in the coming weeks.
The full statement issued by KVB reads as follows:
This announcement is made by KVB Kunlun Financial Group Limited (the “Company”, together with its subsidiaries, the “Group”) pursuant to Rule 17.10 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and the Inside Information Provisions (as defined in the GEM Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).
Based on the preliminary review by the board of directors (the “Board”) of the Company on the unaudited management accounts of the Group for the year ended 31 December 2016 (the “Relevant Year”), the Board wishes to inform the shareholders of the Company and potential investors that the Group is expected to record a significant decrease in net profit by over 50% for the Relevant Year as compared to the year ended 31 December 2015. Such decrease in net profit for the Relevant Year was mainly attributable to (i) the decrease in leveraged foreign exchange and other trading income as a result of decreased market volatility; (ii) the decrease in cash dealing income which was mainly attributable to decline in trading volume in cash dealing business; and (iii) the increase in fee and commission expenses paid to service providers.
This announcement is a preliminary assessment made by the management of the Company based on the internal unaudited management accounts of the Group for the Relevant Year, which have not been audited or reviewed by the Company’s independent auditor, nor have been confirmed by the audit committee of the Company. The Company is in the process of finalising the results for the Relevant Year for the review by the independent auditor and the audit committee of the Company. The annual results announcement for the Relevant Year is to be published not later than 31 March 2017.
Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.
By order of the Board
KVB Kunlun Financial Group Limited
Hong Kong, 8 February 2017