Xceed might make money in 2nd half, CEO says
Three-month TSX trading in Xceed Mortgage
Xceed Mortgage Corp. has shrunk dramatically in the wake of mortgage market problems and and is still reporting large losses, but it may make money in its second half after changing its business model, the Toronto-based company said Thursday.
During the second quarter ended April 30, Xceed finished its shift from selling "non-traditional" mortgages to offering those that qualify for insurance and participation in a federal mortgage program, chairman and CEO Ivan Wahl said in a news release.
"With the shift to focusing on insurable mortgages, we also proceeded with structuring our organization to suit the current market conditions and our reduced volume of business," he said.
The restructuring that followed the turmoil in the non-traditional mortgage business has been painful:
About 100 employees were laid off, out of 137.Mortgage sales in the 2008 second quarter were $78.2 million, compared with $339.8 million in the comparable 2007 quarter.The dividend was suspended.The stock closed Thursday at $1.20, down from a 52-week high of $7.75.The restructuring has caused large losses on financial instruments and unusual charges, so Xceed has reported large losses.
The loss for the second quarter of 2008 ended April 30 was $16.7 million (60 cents a share, diluted), compared with a profit of $4.7 million (16 cents) a year earlier. Revenue was $2.6 million, compared with $16.4 million.
The loss for the first half of 2008 was $15.2 million (54 cents a share diluted), compared with a profit of $11.5 million (40 cents) a year earlier. Revenue was $8.4 million, compared with $33.9 million.
0 comments:
Post a Comment