Leading US forex broker Forex Capital Markets, aka FXCM (NYSE:FXCM), announced key July trading metrics and financial results for Q2 of 2016. FXCM reported a $60.5 million net profit on revenues of $70.6 million for the second quarter of the year. As the broker continues to generate operating cash flow, Leucadia said that its debt is expected to be fully repaid in 2017.
According to FXCM’s report, the broker took in $70.6 million in revenues during Q2, which represents a slight decrease by 1% from Q1. What is more, For the first six months of the year, trading revenue of FXCM totaled $138.7 million, 8% up compared to last year.
Meanwhile, FXCM’s EBITDA in Q2 came in at $10.9 million, also slightly up from the previous quarter when it amounted to $10.3 million. Still, most of that cash flow went toward paying the growing interest on the Leucadia loan. FXCM paid out $21.2 million in interest during Q2, which is nearly two times its EBITDA.
In addition, FXCM, included in the report its July retail volumes, which continued the upward trend from June, coming in at $281 billion. The figure represents a slight increase by 2% from the previous month, and a decline of 11 YoY. In contrast to retail segment, institutional trading volumes in July posted a decline MoM (by 28%) and an increase YoY (by 11%), coming in at $41 billion.
Although the reported trading metrics are a mixed bag, FXCM’s operations are quite stable. Nonetheless, most of the money it is making serve to cover its unfavorable debt, the interest for which will rise to 19% per annum in the third quarter of the year.
The $300 million loan from National Corporation (NYSE: LUK) was necessitated after the Swiss Franc spike in January 2015, when FXCM suffered great losses. Currently, the remaining outstanding principal balance of the loan amounts to $192.5 million. Leucadia said that it was pleased with FXCM’s investment and expects the loan to be repaid in full in 2017, since the broker continues to generate operating cash flow.
FXCM, the US leader in terms of client deposits, is a registered futures commission merchant (FCM) and a retail foreign exchange dealer (RFED) with the US CFTC. It has units registered and regulated with the relevant authorities in the US, the UK, Australia, and France.
The broker offers forex, contracts for difference (CFDs), and spread betting services. It offers 40 currency pairs on the Trading Station and MetaTrader 4 (MT4) platforms.