Kingsway International Reports Financial Results for the Second Quarter Ended December 31, 2008



    TORONTO, Feb. 13 /CNW/ - Kingsway International Holdings Limited (TSX:
KIH), a Hong Kong based international financial services provider, today
reported its financial results for the second quarter ended December 31, 2008.
All figures are in U.S. dollars unless otherwise specified.
    The financial performance for Kingsway International Holdings Limited
("Kingsway" or the "Company") and its subsidiaries (collectively the "Group")
for the second quarter were negatively impacted by the continuing liquidity
and financial difficulties affecting capital markets worldwide.

    
    Financial highlights for the second quarter include:

    -   Net loss was $6.7 million, or $0.0837 per share, compared with a net
        loss of $0.3 million, or $0.0042 per share, for the same period last
        year;

    -   Revenue from services and other income decreased to $2.5 million
        compared with $6.8 million for the same period last year;

    -   Trading loss from financial assets held for trading was $7.0 million
        compared with $1.9 million for the same period last year.
    

    Financial Results for the Second Quarter

    The Group reported negative total revenue for the second quarter of $4.5
million compared with revenue of $4.9 million for the same quarter last year.
Revenue from services and other income decreased to $2.5 million from $6.8
million for the second quarter of last year, as a result of the market
correction and the fall in demand for capital market investments. Trading loss
on investment in financial assets held for trading was $7.0 million compared
with $1.9 million for the corresponding quarter last year, attributable to the
devaluation of investment portfolio during the period.
    Selling and administrative expenses decreased 20% to $4.8 million from
$5.9 million for the same quarter last year. The decrease was attributable to
decrease in variable staff costs, which was in line with the decrease in
revenue from services and other income.
    Equity share of results of investments subject to significant influence
changed from profit of $1.2 million in second quarter last year to loss of
$0.6 million in the current quarter, mainly attributable to the unrealized
loss suffered on the investment portfolio.
    Loss before non-controlling interests of $7.8 million was recorded for
the quarter compared with $1.0 million for the same period last year. Net loss
in the second quarter was $6.7 million, or $0.0837 per share, compared with a
net loss of $0.3 million, or $0.0042 per share, for the corresponding quarter
last year.

    
    Segmented Results of Operations for the Second Quarter

    -------------------------------------------------------------------------
                         Corporate            Investment in
                         Finance &             Securities   Corporate
                          Capital    Asset    & Structured  and Other
               Brokerage  Markets  Management  Investment  Activities  Total
                 $'000     $'000     $'000       $'000        $'000    $'000
    -------------------------------------------------------------------------
    Commission
     & fee
     income       1,372       474         49         10        152     2,057
    Interest
     and other
     income         124         1          1        219         62       407
    Trading
     (loss)/
     income          (7)      568       (445)    (7,107)        30    (6,961)
    -------------------------------------------------------------------------
                  1,489     1,043       (395)    (6,878)       244    (4,497)

    Inter-
     segment
     revenue         48         -          5          -        615       668
    Selling and
     admini-
     strative
     expenses    (2,193)   (1,412)       (60)      (302)    (1,460)   (5,427)
    Equity
     share of
     profit/
     (loss) of
     investments
     subject to
     significant
     influence      (94)        -         30       (488)         -      (552)
    Other
     expenses       (34)      (13)        (1)      (385)       (69)     (502)
    -------------------------------------------------------------------------
    Loss before
     income
     taxes and
     non-
     controlling
     interests     (784)     (382)      (421)    (8,053)      (670)  (10,310)
    -------------------------------------------------------------------------

    -   Brokerage

        Revenue for the second quarter decreased to $1.5 million, compared
        with $4.6 million for the same quarter last year, attributable to the
        depressed market conditions.

        The division recorded an overall loss of $0.8 million for the
        quarter, compared with an income of $1.4 million for the same period
        last year.

    -   Corporate Finance & Capital Markets

        As a result of the significant drop in underwriting and placements
        transaction, revenue decreased to $1.0 million in the second quarter,
        compared with $1.9 million in the corresponding quarter last year.

        The division recorded a loss of $0.4 million for the quarter,
        compared with an income of $0.7 million for the same period last
        year.

    -   Asset Management

        The division had total negative revenue of $0.4 million for the
        quarter, compared with $1.0 million for the same period last year. An
        overall loss of $0.4 million was recorded in the current period,
        compared with $1.6 million in same quarter last year. The decrease in
        loss was mainly due to the significant drop in value of investments
        received as compensation for services during second quarter of last
        year.

    -   Investment In Securities and Structured Investment

        The division recorded a trading loss of $7.1 million in the second
        quarter, compared with $1.1 million in the same quarter last year. As
        a result of the market correction, net loss of $8.1 million was
        recorded in the division in the second quarter, compared with $1.6
        million in the same period last year.

    -   Corporate and Other Activities

        The corporate and other activities of the Group incurred an overall
        loss of $0.7 million for the quarter, compared with an income of $0.3
        million in the same period last year.
    

    Dividends

    The FY 2008 final dividend of C$0.020 (equivalent to US$0.016) per common
share was paid on November 26, 2008 and was reflected as an appropriation of
retained earnings during the period ended December 31, 2008.

    Outlook

    Continuing uncertainties in the global capital markets combined with
tightening credit markets worldwide have resulted in substantial reduction in
values of most capital market participants.
    It is anticipated that these conditions will continue to impact
valuations for the foreseeable future and result in sluggish capital market
activity. These conditions will continue to impact the performance of the
Group during this period of reduced activity.
    The Company continues to take a long term view of the opportunities in
Asia and believes that its position as a financial services provider, with an
emphasis on natural resources, will enable the Company to develop into a
unique player in the region. The Company recently created the investment and
advisory services group, raised C$7.5 million in September 2008 to fund their
operations and is well positioned to benefit from this emphasis.

    About Kingsway International Holdings Limited

    The Company is listed on the main board of the Toronto Stock Exchange
(TSX) under the symbol KIH. The Group is a leading middle tier financial
services provider, linking the global investment community with PRC's high
growth economy. In addition to engaging in proprietary investment activities,
the Group offers a variety of complementary, client focused services through
its investment banking, brokerage and asset management divisions.
    Founded in 1990, the Group operates from offices in Hong Kong, Beijing,
Shanghai, Shenzhen and Toronto.

    Forward-Looking (Safe harbour) Statements

    This press release contains forward-looking statements that are based on
the beliefs of Management and reflect the Group's current expectations. In
certain cases, forward-looking information can be identified by the use of
words such as "estimate", "project", "belief", "anticipate", "intend",
"expect", "plan", "predict", "may", "should", "will", or variations of such
words and phrases or state that certain actions, events or results ''may'',
''could'', ''would'', ''might'' or ''will be taken'', ''occur'' or ''be
achieved''. Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking information. There
can be no assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, investors should not place
undue reliance on forward-looking information. Forward-looking information is
provided as of the date of this press release, and the Company assumes no
obligation to update or revise them to reflect new events or circumstances.





For further information:

For further information: Gary Quedado, Kingsway Group, (416) 861-3099
Ext. 238, gquedado@kingswaygroup.ca

Organization Profile

KINGSWAY INTERNATIONAL HOLDINGS LIMITED

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