FXCM turns to net income despite sharp drop in revenue in Q1-Q3 2016

FXCM turns to net income despite sharp drop in revenue in Q1-Q3 2016

- in All News, Featured News, Forex Brokers
FXCM

US forex giant Forex Capital Markets (NASDAQ:FXCM) said on Tuesday it turned to a net income of $71 million in first nine months of 2016 from a net loss of  $449 million a year earlier.
Net revenue amounted to $203.5 million in the January-September period, posting a significant drop of 39.3% from the preceding year. Meanwhile, trading revenue went up 6.4% to $196.6 million.

The broker did not provide a comment on the financial performance for the past period. The results are not surprising, considering FXCM faced a very tough 2015, which started with the the Swiss franc-related crisis from January that year.

To offset the effects of the crisis and to resume operations normally, the broker drew a $300 million cash credit from US lender Leucadia National Corp.

The latest financial results include a $200.4 million net gain on derivative liabilities for the nine months in 2016 and a $254.7 million net loss on derivative liabilities for the same period in 2015.

In the third quarter however, FXCM turned to a net loss of $39.1 million despite a slight increase in revenue. A year earlier it reported a net income of $73.7 million for the July-September period. The broker’s trading revenue went up 2.9% on the year to $59.6 million in the third quarter of 2016.

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The broke also provided trading metrics for the month of October.

Meanwhile, Gain Capital, which is one of FXCM’s main competitors, also announced last week it turned to a consolidated net profit of $14.5 million in the January-September 2016 period from a net loss of $700,000 a year earlier, while its consolidated net revenue dropped by an annual 11% to $296.1 million.

The FXCM Group is 50.1% majority owned by FXCM Inc. The rest of the group moved to the hands of Leucadia National Corporation earlier this month as part of a a definitive agreement the two companies signed to amend the conditions of their credit letter agreements.

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