KVB Kunlun sees Revenues down 45% (!) in Q1, posts HK$7.1 million loss

We reported last week that Hong Kong based retail FX broker KVB Kunlun (HKG:8077) had issued a profit warning for Q1, blaming an expected loss on reduced market volatility, a rampup in marketing expenses during Q1, and expenses related to the grant of share options to senior KVB employees. KVB at the time didn’t give any specific numbers as to the size of the loss.

Well now we know. And we know the source of the problem – a major drop in revenues at KVB.

KVB reported that Q1 Revenues came in at HK$24.3 million (US$3.1 M), a whopping 45% below Q4’s HK$44 million. The result was a net loss of HK$7.1 million (US$1 M) in Q1 at KVB.

KVB shares on the Hong Kong Exchange (HKG:8077) dropped 4% on Monday

While everyone in the retail FX world understands that things don’t necessarily move in a straight line in the industry, KVB’s results contrast sharply with those of Plus500 (LON:PLUS), which went public at around the same time as KVB. Plus500 has been more successful at leveraging its reputation as a public company to grow volumes and revenues — Plus500 quarterly revenues topped $60 million in Q1, up from $50 million in Q4 and results in the sub-$25 million range before going public.

To see KVB Kunlun’s complete Q1 financial report click here (pdf).


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