Malta Stock Exchange-listed GlobalCapital has practically halved its interim losses over last year’s results, but the financial services company has remained in the red for the first half of 2009 amid challenging market conditions.
Net losses before tax for the first half of the year amounted to e2,394,200, compared to losses of e4,962,153 registered in the first half of 2008.
In a statement issued on Friday, the company noted, “The severe downturn in global major economies and the financial services industry has continued to negatively impact GlobalCapital during the first six months of 2009.
“The Group’s portfolio of investment securities was further negatively impacted by the continued stock market downturn during the first quarter of the year. However, the second quarter registered an improvement in the performance of the Group’s investment portfolio.”
This improvement, together with other measures taken, are primarily reflected in the balance on the long term business of insurance technical account before tax (the technical account of the life insurance company) which produced a positive result of e437,574 compared to a loss of e1,697,779 over the comparable period last year.
The focus directed towards identifying and improving operational efficiencies coupled with the review and management of costs continued throughout this period, the company notes, resulted in a 14 per cent decrease in administrative expenses when compared to the same period in 2008.
Speaking about the results, Group Chief Executive Officer Nicholas Portelli commented, “During the past six months, international markets have produced mixed signals, with some signs of improvements although the road to recovery remains uncertain. Our total premium income and revenues from the agency and brokerage business are up when compared to the same period last year. However, reduced investor confidence has continued to affect market appetite for investment products, resulting in reduced sales and weaker commission income from investment sales.
“The property portfolio has remained stable, and will be further strengthened with the addition of two important property projects that are currently underway. These projects are expected to be completed early next year.
“Significant measures adopted since late 2008 to reduce costs, implement more efficient work practices and enhance our operations, have contributed to more cost savings as administrative expenses dropped to e2,352,917 in the first six months of this year as opposed to e2,751,780 in the same period of 2008.”
GlobalCapital Chairman Nicholas Ashford-Hodges said, “The board is maintaining its focus on cost management throughout the group but at the same time implementing strategies aimed at bolstering income generation. The overall results are significantly impacted by the performance of the markets, so despite measures taken to mitigate the impact, the general improvement in the macroeconomic environment and the stability of the stock markets are two key components that will impact the group’s performance going forward.”