FXCM Financial Results Ramp Up in Q2 2017 But Still Down YoY

FXCM managed to achieve a slight boost across revenues and net income on a quarter-over-quarter basis.

Foreign exchange and CFDs brokerage FXCM Group has just released its financial results for Q2 2017. Its metrics take a dive year-over-year though it was able to generate positive results relative to the first quarter, according to a corporate statement.

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Detailing the results, FXCM’s net revenues under the US GAAP for Q2 2017 came in at $49.4 million, constituting a drop of 10.11 percent when compared with $54.7 million in the same quarter a year ago. However, the company saw a slight advance on a quarter-over-quarter basis, having notched a 7.6 percent increase compared to Q1 2017.

For the three months ending June 2017, FXCM yielded an Adjusted EBITDA from continuing and discontinued operations at $8.5 million, down 22.0 percent vs. $10.9 million in Q2 2016. This figure was again better across a quarterly timetable, revealing an increase of 26.9 percent over the same figure from the first quarter.

In terms of FXCM’s net income, the company achieved a net loss of $2.4 million, compared to $28.2 million in net loss during the Q1 2017.

Coupled with a breakdown of its Q2 2017 financial results, FXCM revealed selected information from its balance sheet data as of June 30, 2017. Specifically, FXCM reported credit agreement to Leucadia at $119.7 million and total assets at $596.7 million.

Brendan Callan, CEO of FXCM, commented: “In the second quarter of this year we were able to generate solid Adjusted EBITDA from continuing operations of $10.5 million in a difficult environment of particularly low volatility. This is in large part due to strong revenue capture in our FX and CFD businesses coupled with a substantial cost reduction earlier this year.”

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“With the expected proceeds from the pending sale of our stake in FastMatch, we expect our balance sheet to further improve as we continue to pay down our debt to Leucadia. We remain very optimistic about the future of our business,” concluded Callan.

Global Brokerage still in trouble

Global Brokerage, Inc. (NASDAQ:GLBR), the company that indirectly owns 37.3 percent of FXCM Group LLC, has reiterated the possible heavy consequences of the eventual delisting from the Nasdaq Stock Market due to the low market value of the firm.

“This could lead to an event of default under the terms of our debt arrangements,” the company warned.

According to the official announcement supplementing the earnings report, the company offers no assurance that it will continue to be listed on the Nasdaq after October 31, 2017.

The statement further reads:

“On May 2, 2017, the Nasdaq Stock Market notified us that, for the prior 30 consecutive business days, the market value of our publicly held shares does not meet the requirement for continued listing under the Nasdaq Global Select Market listing rules which could lead to our eventual delisting from the Nasdaq Global Select Market by October 30, 2017 if not rectified. This could lead to an event of default under the terms of our debt arrangements. Notwithstanding an event of default under the terms of our debt arrangements due to a potential delisting, absent a restructuring of our Senior convertible notes, a sale of other assets or a capital infusion, we do not have the resources to pay the principal balance of our Senior convertible notes of $172.5 million in full at maturity in June 2018.

Accordingly, we believe that the potential delisting and the upcoming maturity of the Senior convertible notes within less than 12 months raise substantial doubt about our ability to continue as a going concern. We are actively working with financial and legal advisers to explore a potential restructuring.”


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