Van Der Moolen Reports a Loss of EUR 4.3 Million for the First Quarter of 2007
May 16 2007 - 2:04AM
Business Wire
Van der Moolen (NYSE:VDM) (AEX:VDMN) announces that it report a net
loss attributable to its common shareholders of � 4.3 million in
the first quarter 2007 compared with � 45.1 million loss in the
fourth quarter of 2006 and a profit of � 11.1 million in the first
quarter of 2006. � � Key Figures � � � � � Euros millions 1st
quarter 2007 1st quarter 2006 4th quarter 2006 � � � � � � Revenues
39.6� 39.0� 2% 36.8� 8% Operating profit (loss) (1.0) 29.3� -103%
0.9� -211% Profit (loss) for the period (4.4) 14.0� -131% (43.5)
-90% Profit (loss) attributable to common equity holders of the
Company (4.3) 11.1� -139% (45.1) -90% Guarantee capital 279.5�
451.1� -38% 298.6� -6% Per common share data (Euros x 1) � � � �
Profit (loss) (0.09) 0.25� -138% (0.99) -91% Diluted profit (loss)
(0.09) 0.25� -138% (0.99) -91% � � � � � � Average US dollar/Euro
rate 0.76� 0.83� -8% 0.78� -3% ��Obviously these are changing and
challenging times for the specialist business in the US on the NYSE
commented Richard den Drijver, chief executive officer of Van der
Moolen Holding and chairman and chief executive officer of Van der
Moolen specialist. The implementation of the NYSE hybrid system is
a learning curve for the company and we have a proven track record
in Europe in changing from floor trading to screen trading and we
see it as a challenge to be successful in this process. We see the
value of the NYSE hybrid system and the value that it brings to the
investing public with regard to trading transparency, committing
capital and providing liquidity to the investor�s community�.
Results for the first quarter 2007 Revenues At � 39.6 million, our
reported revenues in the first quarter were 8% higher than in the
fourth quarter of 2006 and 2% above those earned in the first
quarter of 2006. For comments on the developments of the revenues
we refer to our press release dated April 24, 2007. For a more
detailed description of the development trends of our business
segments we refer to our press release released March 15, 2007.
Operating expenses Total operating expenses in the first quarter
2007 were � 4.2 million higher than those recognized in the fourth
quarter 2006 and � 8.9 million higher than the first quarter 2006.
Factors that strongly influenced the comparison with the fourth
quarter and/or first quarter 2006 are set out below. Employee
benefit expenses increased by � 4.7 million and � 7.3 million
compared to the fourth and first quarter of 2006, respectively.
This increase is mainly due to severance payment expenses in the
amount of � 2.0 million related to the reduction of employees in
VDMS and VDM Effectenspecialist Amsterdam, negatively affecting net
income by � 1.6 million. In addition, variable employee
compensation and benefit expense increased by � 3.1 million and �
4.5 million compared to the fourth and first quarter of 2006,
respectively. This increase is mainly attributable to changes in
the relative contribution of the different bonus arrangements in
place throughout the Group. The variable employee compensation is
almost fully attributable to the strong performance of the European
Trading segment. G&A expenses decreased by � 1.3 million and �
0.4 million compared to the fourth quarter and first quarter of
2006, respectively. The decrease is mainly due to the cost cutting
focus of management in the first quarter of 2007 as well as a one
off amount of � 0.6 million due to the for VDM favourable
settlement of accrued legal fees of a former partner of VDMS.
Operating profit First quarter 2007 operating loss was � 1.0
million, compared with � 0.9 million profit in the preceding
quarter and � 29.3 million profit in the first quarter of 2006.
Operating profit for the first quarter of 2006 was positively
influenced by a gain of � 22.0 million related to the NYSE
consideration received in March 2006, following the NYSE merger.
Excluding the other gains and losses (net), the amortization
expense and the impairment of fixed assets, operating profit
amounted to � 0.1 million compared with � 1.4 million in the fourth
quarter 2006 and � 8.3 million in the first quarter 2006. The
operating margin calculated on this basis was 0.3% in the first
quarter 2006, compared to 3.8% and 21.3% in the fourth quarter and
first quarter 2006, respectively. Net financing costs Net financing
costs amounted to � 2.2 million in the first quarter 2007, compared
to � 2.4 million recognized in the fourth quarter 2006 and � 3.8
million recognized in the first quarter 2006. The net financing
costs of the first quarter 2006 include financing costs amounting
to � 1.1 million related to the financing preferred shares. As per
April 5, 2006, following the approval of proposed changes in the
Articles of Association by the AGM, the financing preferred shares
are presented as equity instrument under IFRS. In conformity with
this treatment, the preferred financing dividend is, as from April
5, 2007, no longer classified as a component of finance costs.
Income tax Income tax expense in the first quarter 2007 was � 1.2
million, representing a consolidated effective tax rate of 57%
(negatively) against a � 42.0 million expense in the preceding
quarter and a charge of � 11.5 million, or 51%, in the first
quarter of 2006. The consolidated effective tax rate in the current
quarter reflects the impact of the non-recognition of the (net)
deferred tax asset positions related to our US activities. As the
deferred tax assets resulting from our US activities are not
recognized, no recognition of a tax benefit in the income tax line
of the profit and loss statement is applicable. EPS The weighted
average number of outstanding shares to calculate basic earnings
per share is 46.680.891, being the number outstanding at year-end
2006 (excluding treasury shares) with - in addition - the weighted
impact of the shares issued on January 2, 2007 in relation to the
earn out 2005 of the acquisition of Curvalue and the shares
issuable in respect of the earn-out 2006, which are considered to
be "earned" at January 1, 2007. Loss per common share was �0.09 in
the first quarter 2007, compared to a loss of �0.99 and a profit of
�0.25 in the fourth and first quarter of 2006, respectively.
Balance sheet Balance sheet total On March 31, 2007 our Balance
Sheet total was � 2.2 billion compared to a Balance sheet total of
� 1.7 billion recognized at December 31, 2006. Intangible assets
Intangible assets, including goodwill, decreased from � 84.9
million at December 31, 2006 to � 84.3 million at March 31, 2007.
This decrease is almost fully due to the amortization of
amortizable intangible fixed assets in the first quarter of 2007
and the impact of the devaluation of the US currency against the
euro. Guarantee capital Guarantee capital, which consists of total
equity plus the non-current portion of our subordinated
indebtedness (including financing preferred capital and capital
contributions from minority members), decreased from � 298.6
million to � 279.5 million during the period under review. This
decrease is mainly due to the loss contribution during the period,
a � 15 million repayment of subordinated borrowings and a � 0.3
million negative change in fair value reserve. Cash and cash
equivalents The Group has approximately � 10 million of
free-available cash (including disposition on security positions
and other assets) (December 31, 2006: � 19 million). Further, it
has � 15 million available in short-term committed credit lines.
Non-current cash and cash equivalents The non-current cash and cash
equivalents reflect that part of cash and cash equivalents that is
held by VDM Specialists for purposes of compliance with the Net
Liquid Asset (NLA) requirement set by the New York Stock Exchange.
The total NLA requirement amounts to $ 121.2 million at March 31,
2007. It is our current assessment that the NLA requirement will be
reduced by approximately $ 27 million in the remainder of 2007.
Available for sale assets The balance sheet at March 31, 2007,
reflects the number of NYSE Group shares owned, valued at the
quoted bid price of those shares. Cash flow Cash flow from
operating activities Cash flow from operating activities amounted
to � 76.6 million negative in the first quarter of 2007, mainly due
to the first quarter loss and a cash outflow of � 89.5 million due
to the development of our trading position in the first quarter,
which is partly offset by the � 12.0 million release from the
non-current cash and cash equivalents. Cash flow from investing
activities Cash flow from investing activities amounted to �1.0
million negative, mainly related to investment in software and
tangible fixed assets. Cash flow from financing activities Cash
flow from financing activities amounted to � 25.3 million negative,
mainly caused by the repayment of subordinated debt in March 2007,
interest payments and repayment to minority members. Subsequent
events Preferred financing shares A On April 26, 2007, the AGM
approved the repurchase and cancellation of 251,000 cumulative
financing preferred shares A of the Company at a purchase price of
� 10.405.148. Disclaimer: This press release contains
forward-looking statements within the meaning of, and which have
been made pursuant to, the Private Securities Litigation Reform Act
of 1995. All statements regarding our future financial condition,
results of operations and business strategy, plans and objectives
are forward-looking. Statements containing the words �anticipate,�
�believe,� �intend,� �estimate,� �expect,� �hope,� and words of
similar meaning are forward-looking. In particular, the following
are forward-looking in nature: statements with regard to strategy
and management objectives; pending or potential acquisitions;
pending or potential litigation and government investigations,
including litigation and investigations concerning specialist
trading in the U.S.; future revenue sources; the effects of changes
or prospective changes in the regulation or structure of the
securities exchanges on which our subsidiaries operate; and trends
in results, performance, achievements or conditions in the markets
in which we operate. These forward-looking statements involve
risks, uncertainties and other factors, some of which are beyond
our control, which may cause our results, performance, achievements
or conditions in the markets in which we operate to differ,
possibly materially, from those expressed or implied in these
forward-looking statements. We describe certain important factors
to consider in connection with these forward-looking statements
under �Key Information � Risk Factors� and elsewhere in our annual
filing with the U.S. Securities and Exchange Commission on Form
20-F. We caution you not to place undue reliance on these
forward-looking statements, which reflect our management�s view
only as of the date of this Report. We have no obligation to update
these forward-looking statements. Van der Moolen Holding N.V.
Consolidated Profit and Loss Account (IFRS, Unaudited) (amounts in
millions of Euros, except per share data) Q1 Q1 % Q4 % � 2007�
2006� � 2006� � � Revenues 39.6� 39.0� 2% 36.8� 8% � Other gains
and losses - net -� 22.0� -100% 0.5� -� Exchange, clearing and
brokerage fees/trading licenses (12.4) (10.5) 19% (11.9) 5%
Employee benefit expense (19.9) (12.6) 58% (15.2) 31% Depreciation
and amortization expenses (1.7) (1.6) 5% (1.4) 20% General and
administrative expenses (6.6) (7.0) -6% (7.9) -17% � Total
operating expenses (40.6) (31.7) 28% (36.4) 12% � Operating profit
(loss) (1.0) 29.3� -103% 0.9� -212% � Net financing costs (2.2)
(3.8) (2.4) � Profit (loss) before income tax (3.2) 25.5� -113%
(1.5) 113% Income tax benefit / (expense) (1.2) (11.5) (42.0)
Profit (loss) for the period (4.4) 14.0� -132% (43.5) -90% � Profit
attributable to minority interest (1.1) 2.9� 0.6� Preferred
financing dividend 1.0� -� 1.0� Profit (loss) attributable to
common equity holders of the Company � (4.3) 11.1� -139% (45.1)
-90% � � � � � � Average number of common shares outstanding
46,680,891� 44,970,390� 4% 45,504,926� 3% Diluted average number of
common shares outstanding 46,680,891� 44,987,662� 4% 46,680,891� 0%
Per common share data: Profit (loss) per common share (0.09) 0.25�
-138% (0.99) -91% Diluted profit (loss) per common share � (0.09)
0.25� -138% (0.99) -91% � � � � � � � � Van der Moolen Holding N.V.
Q1 Q1 % Q4 % Revenue breakdown in millions of Euros � 2007� 2006� �
2006� � US Specialists 6.4� 22.6� -72% 16.8� -62% US others 1.3� -�
0.8� 63% European Trading 20.7� 7.9� 162% 9.6� 116% PMM/CMM
Principal Trading 6.3� 5.1� 24% 5.6� 13% Brokerage activities 4.9�
3.4� 44% 4.0� 23% Total revenues 39.6� 39.0� 2% 36.8� 8% � � � � �
� Van der Moolen Holding N.V. Q1 Q1 % Q4 % Operating profit before
other gains and losses (net), before amortization of intangible
fixed assets and before impairment, breakdown in millions of Euros
� 2007� 2006� � 2006� � US Specialists (2.2) 9.1� -124% 6.1� -136%
US others (0.3) -� (0.4) -25% European Trading 5.0� 2.0� 150% (0.5)
-1100% PMM/CMM Principal Trading 1.6� 0.8� 100% 0.3� 433% Brokerage
activities (0.4) (0.3) 33% (0.8) -50% Unallocated and Holding (3.6)
(3.3) 9% (3.3) 9% Total operating profit before other gains and
losses (net), before amortization of intangible fixed assets and
before impairment � 0.1� 8.3� -99% 1.4� -93% Van der Moolen Holding
N.V. Consolidated Balance Sheet (IFRS, unaudited) � � � � � �
(amounts in millions of Euros) � � March 31, 2007 December 31, 2006
Assets Non-current assets Intangible assets 84.3� 84.9� Property,
plant and equipment 5.9� 6.1� Financial fixed assets 17.3� 17.2�
Available-for-sale financial assets 21.1� 21.9� Cash and
cash-equivalents 91.0� 103.0� � � 219.6� 233.1� Current assets
Securities owned 1,600.8� 1,077.8� Due from clearing organizations
and professional parties 281.7� 223.0� Current assets and prepaid
expenses 20.1� 18.2� Cash and cash-equivalents 83.9� 114.9� � � � �
1,986.5� � � 1,433.9� Total assets � 2,206.1� � � 1,667.0� � Equity
and liabilities Capital and reserves attributable to the Company's
equity holders 209.6� 215.3� Minority interest 4.7� 4.7� � � Total
equity 214.3� 220.0� Non-current liabilities Capital of minority
members 8.9� 13.7� Subordinated borrowings 56.3� 64.9� Other
non-current liabilities 8.1� 8.4� � � 73.3� 87.0� Current
liabilities Securities sold, not yet purchased 1,385.7� 967.7� Due
to clearing organizations and professional parties 283.0� 212.3�
Due to customers 7.4� 3.9� Short-term borrowings 28.7� 38.9� Bank
overdrafts 184.6� 112.4� Other current liabilities and accrued
expenses 29.1� 24.8� � � � � 1,918.5� � � 1,360.0� Total equity and
liabilities � � 2,206.1� � � 1,667.0� � � � � � � � Guarantee
capital � � 279.5� � � 298.6� Van der Moolen Holding N.V. Movement
schedule of shareholders'equity (IFRS, unaudited) � Movement in
shareholders'equity � � � � (Amounts in millions of euros) 3 months
3 months � 2007� 2006� � Shareholders' equity at January 1 215.3�
221.2� Adjustment prior year -� (0.4) Issued common shares and
issuable shares (Curvalue acquisition), net of shares held in
treasury -� 46.7� Contribution to dividend reserve financing
preferred shareholders 1.0� -� Currency exchange differences (2.1)
(4.6) Profit (loss) attributable to common equity holders of the
Company (4.3) 11.1� Sale of treasury shares -� 0.2� Fair value
change on available-for-sale financial assets (0.3) � (3.0) � (5.7)
50.0� Shareholders' equity at March 31 � 209.6� � 271.2� Van der
Moolen Holding N.V. Consolidated statement of cash flow (IFRS,
unaudited) � Consolidated statement of cash flow � � � (Amounts in
millions of Euros) 3 months 2007 3 months 2006 � � � � Cash flow
from operating activities (76.6) (0.6) � Cash flow from investing
activities (1.0) 12.9� � Cash flow from financing activities (25.3)
(15.5) � Currency exchange differences on cash and
cash-equivalents, net of bank overdrafts (0.3) 0.7� � Change in
cash and cash-equivalents, net of amounts of bank overdrafts
(103.2) (2.5) � Cash and cash-equivalents, net of amounts of bank
overdrafts at January 1, 2.5� 1.6� � � Cash and cash-equivalents,
net of amounts of bank overdrafts at December 31, � (100.7) � (0.9)
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