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With fortunes only having begun to return to form for many FX firms in the twilight months of this year, it is to be expected that when releasing reports for the first nine months of 2014, the figures are likely to be in the doldrums.
This dynamic rings true for Hong Kong-focused FX firm KVB Kunlun, which today announced a 17.7% downturn in revenues gained from its FX business for the period ending September 30, 2014 compared to the same time last year, which by contrast was a period of high volumes across the entire industry.
According to the company’s as yet unaudited accounts, between the beginning of the year and September 30, KVB Kunlun made HK$ 84 million in revenues from leveraged FX, compared to HK$100.3 million in the same period last year.
Total income declined from HK$ 132.5 million to HK$ 117.5 million for the first nine months of 2014 compared to the same period last year.
Interestingly, when viewed on a quarterly basis, the summer months of this year had served to mitigate the decreasing revenues, comparing favorably to the summer of last year, with income from FX business having increased to HK$ 41.3 million compared with the three months ending September 30 2013’s HK$ 30 million, with total income from all commercial operations in the last three months of the reporting period substantially increasing to HK$ 60.5 million compared to July, August and September last year’s HK$ 36.9 million.
This upturn in trading volumes went some way toward countering the losses that the firm sustained earlier this year, when KVB Kunlun’s board issued a warning to shareholders to exercise caution when dealing in company stock in the advent of corporte losses.
With the company’s results making a revertion toward being back on track in the summer months of this year, losses have reduced, however according to the company’s report, no dividend will be payable to shareholders.
On that point, a key event that has been included in the report is that On January 10, 2014, the Board of Directors of the Company has granted 40,000,000 share options to 68 individuals (“Grantees”) for their subscription of new ordinary shares of HK$0.01 per share
of the Company.
KVB Kunlun recorded its total income figures as depicting an 11.2% decrease from approximately HK$132.5 million for the corresponding period of the previous year. The Group recorded a profit of HK$14.2 million for the 9 months ended 30 September 2014 compared to the profit of HK$23.6 million for the same period last year.
The decrease in both total income and profit is mainly attributed to the low volatility in the FX and Commodity markets during the 9 months ended 30 September 2014 compared to that during the 9
months ended 30 September 2013.
Total expenses for the 9 months ended 30 September 2014 amounted to HK$97.6 million, which is an increase of around 0.2% as compared to the same period in 2013. Such increase is mainly due to increases in staff costs and marketing expenses due to the recognition of staff share option expenses and payment to new marketing channels, namely Baidu and Google Advertising.
To read the full report from the Hong Kong Stock Exchange, upon which KVB Kunlun is listed, click here.