FXCM posts $426.8 million Net Loss

FXCM Inc. posted a $426.8 million net loss for the first quarter, hurt by several items stemming from the January surge in the Swiss franc after the Swiss National Bank removed the cap on the currency’s value.

FXCM provides online foreign exchange trading, CFD trading, spread betting and related services.

The company said trading revenue from continuing operations fell 16% to $69.2 million.

It also said April retail customer trading volume was $306 billion, 37% above a year earlier and 7% below March. Institutional customer trading volume was $220 billion, 25% higher than a year earlier and 10% below March.

In after-hours trading on Friday, FXCM’s share price was down 8% to $1.97. The stock closed at $12.63 on Jan. 15 before FXCM announced “significant losses” for its clients and warned of a potential breach of some regulatory capital requirements.

FXCM secured a $300 million rescue package from Leucadia National Corp. and said it would consider sales of noncore assets to help pay off the loan.

FXCM sold its Japan business to a brokerage unit of e-commerce giant Rakuten Inc. for $62 million on April 1. It also agreed to sell Faros Trading LLC to Jefferies Group, which is part of Leucadia.

The Wall Street Journal reported in February that FXCM planned to stop trading some currencies, including the Hong Kong dollar and Danish krone, to avoid potential volatility caused by possible government intervention.

On Friday, the company said it had a strong operating cash position of $328.7 million as of March 31.

The net loss for the quarter ended March 31, which was $9.06 on a per-share basis, included a loss from continuing operations of $393.3 million, or $8.35 a share.

In the year-ago quarter, FXCM reported a profit of $2.1 million, or five cents a share.

Source: Market Watch