Kingsway International Reports Financial Results for the Third Quarter Ended March 31, 2009



    Company shows improvement over last quarter and year-over-year

    TORONTO, May 15 /CNW/ - Kingsway International Holdings Limited (TSX:
KIH), an Asian based financial services firm, today announced its financial
results for the third quarter ended March 31, 2009, reporting a significant
improvement from last quarter as well as year-over-year despite the global
economic recession. All figures are in U.S. dollars unless otherwise
specified.
    "Given the background of the changes occurring in the financial markets
around the world, we are encouraged with this quarter's results and look
forward to continuing to improve our financial performance. We are in the
process of transitioning from a holding company to an asset based financial
services firm focused on China and southeast Asia, where we believe great
opportunities lies," said Douglas Betts, President and CEO of Kingsway
International.
    The financial performance for Kingsway International Holdings Limited
("Kingsway" or the "Company") and its subsidiaries (collectively the "Group")
for the third quarter began gradually recovering from the global financial
crisis with its loss reduced dramatically as compared to the previous quarter
and the same period last year.

    
    Financial highlights for the third quarter include:

    -   Net loss was $0.2 million, or $0.0020 per share, compared with a net
        loss of $5.7 million, or $0.0709 per share, for the same period last
        year and a net loss of $6.7 million in Q2 of FY2009;
    -   Revenue from services and other income remained stable compared with
        last quarter at $2.5 million (Q2 2009: $2.5 million; Q3 2008: $6.8
        million);
    -   Trading income from financial assets held for trading was $2.0
        million compared with loss of $6.7 million for the same period last
        year.
    

    Financial Results for the Third Quarter

    The Group reported total revenue for the third quarter of $4.5 million
compared with $0.1 million for the same quarter last year. Revenue from
services and other income decreased to $2.5 million from $6.8 million for the
third quarter of last year as a result of the market correction and the fall
in demand for capital market investments. Trading income from financial assets
held for trading was $2.0 million compared with a loss of $6.7 million for the
corresponding quarter last year, attributable to stabilization of the global
capital markets during the current period.
    Selling and administrative expenses decreased 35% to $3.9 million from
$6.1 million for the same quarter last year. The decrease was attributable to
decrease in variable staff costs, including bonuses and commissions, which was
in line with the decrease in operating revenue.
    The results as determined by equity accounting changed from loss of $1.3
million in third quarter last year to income of $0.1 million in the current
quarter, mainly due to the unrealized gain on the investment portfolio held by
the investee companies.
    Income before non-controlling interests of $0.2 million was recorded for
the quarter compared with a loss of $7.8 million for the same period last
year. However, net loss in the third quarter was $0.2 million, or $0.0020 per
share, compared with a net loss of $5.7 million, or $0.0709 per share, for the
corresponding quarter last year.

    
    Segmented Results of Operations for the Third 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       1,231       789         16         32         61     2,129
    Interest
     and other
     income          36         -          -        210        139       385
    Trading
     (loss)/
     income         (12)     (133)       475      1,713        (20)    2,023
    -------------------------------------------------------------------------
                  1,255       656        491      1,955        180     4,537

    Inter-
     segment
     revenue         18         -         12          -        579       609
    Selling and
     admini-
     strative
     expenses    (1,984)     (635)       (51)      (370)    (1,505)   (4,545)
    Equity
     share of
     profit/
     (loss) of
     investments
     subject to
     significant
     influence      (15)        -         (3)        86          -        68
    Other
     expenses       (36)       (7)         -       (312)       (77)     (432)
    -------------------------------------------------------------------------
    (Loss)/
     income
     before
     income
     taxes and
     non-
     controlling
     interests     (762)       14        449      1,359       (823)      237
    -------------------------------------------------------------------------

    -   Brokerage

        Revenue for the third quarter decreased to $1.3 million, compared
        with $3.1 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 $0.1 million for the same period last year.

    -   Corporate Finance & Capital Markets

        As a result of the significant drop in underwriting and placements
        transactions, revenue decreased to $0.7 million in the third quarter,
        compared with $3.8 million in the corresponding quarter last year.

        The division recorded income of $0.01 million for the quarter,
        compared with $1.88 million for the same period last year.

    -   Asset Management

        The division had total revenue of $0.5 million for the quarter,
        compared with negative revenue of $0.9 million for the same period
        last year. An overall income of $0.4 million was recorded in the
        current period, compared with a loss of $0.3 million in same quarter
        last year. The increase in revenue was mainly due to an increase in
        the value of investments during the period.

    -   Investment In Securities and Structured Investment

        The division recorded trading income of $1.7 million in the third
        quarter, compared with a loss of $6.5 million in the same quarter
        last year. The portfolio performance outperformed the global market
        due to the investment focus in companies with bias towards PRC
        companies. Net income of $1.4 million was recorded in the division in
        the third quarter, compared with a loss of $9.0 million in the same
        period last year.

    -   Corporate and Other Activities

        The corporate and other activities of the Group incurred an overall
        loss of $0.8 million for the quarter, compared with a loss of $0.1
        million in the same period last year.
    

    Dividends

    The FY2008 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 March 31, 2009.

    Outlook

    The Group operated for the last year in a negative and uncertain market
environment both in Hong Kong and in North America; however, China - a key
area of focus for Kingsway International - remains an optimistic and
opportunistic market for investment activities when compared with other
capital markets around the world. By Q4 of calendar year 2008, most economies
had shown an annualized contraction; China still showed growth of 6-7%, albeit
substantially reduced from previous fiscal periods. We believe this slow down
in a high growth economy may lead to opportunities in the future.
    The Company is in transition, expanding from a holding company whose
principal asset is a Hong Kong based broker dealer to a multi discipline asset
based financial services firm, with additional focus on natural resources,
including mining and energy and infrastructure in addition to financial
services. The transition will be challenging but the opportunities presented
by the change are dramatic.
    China is widely recognized to be an increasingly important player on the
world's financial stage. Two of its greatest needs will be energy and
resources. The Board is positioning the Company to be a recognized provider of
financial services in these sectors and an opportunistic investor in these and
related sectors. The Group has reasonable cash reserves to fund its ongoing
operations and investment activities. Kingsway International's strategy will
be to use its investment activities strategically to generate advisory
services revenue while creating value for its shareholders through asset
accumulation.
    Kingsway International is operating from its base in Hong Kong with a
view to China's needs. While there will be continuing problems with most
economies around the world, the Company believes that the Chinese economy will
continue to improve and generate opportunities for asset management,
investment and advisory services in the sectors in which Kingsway
International is focused.
    Kingsway International continues to take a long term view of the positive
growth prospects for the Company and its subsidiaries.

    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 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
capital markets 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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