Xceed Mortgage looking forward to 2010 after a razor-slim profit in fourth quarter

The Canadian Press ~ The News
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TORONTO - Xceed Mortgage Corp. (TSX: XMC), has a "renewed sense of optimism" about 2010, now that it has survived the 2007 ABCP crisis and 2008-9 recession, the company's chief executive said Thursday as Xceed announced financial results.
Net income in Xceed's fourth quarter of fiscal 2009, which ended Oct. 31, was $800,000 or three cents per share, half the $1.6 million or six cents per share in the fourth quarter of fiscal 2008.
For the full 2009 financial year, Xceed had a $3.3 million net loss, an improvement on its 2008 net loss of $12 million.
Xceed's primary source of revenue is from the sale of pools of mortgage.
The company originated $524.1 million of new mortgages in 2009, a 46.3 per cent increase from the 2008 level.
Total revenue in 2009 was $9.4 million, compared with $22.3 million in 2008. In the fourth quarter ended Oct. 31, 2009, revenue declined to $2.1 million from $6.4 million a year earlier.
Cash flow from operations, which Xceed considers a better financial measure than net earnings, was $12.2 million or 44 cents per share in 2009, including $2.6 million or nine cents per share in the fourth quarter.
That compared with $10.9 million or 39 cents per share for fiscal 2008, including $2.4 million of nine cents per share in the fourth quarter of fiscal 2008.
"Xceed's 2009 year coincided with the worst of the economic recession," said Ivan Wahl, Xceed's chairman and chief executive officer. ""We look forward to our 2010 fiscal year with a renewed sense of optimism."
"Our financial performance indicates that we are headed in the right direction with respect to growing our business and creating value for our investors. We believe that this will be spurred by the recovery of the Canadian economy, even though it appears that this likely will be a gradual process."
Wahl added that Xceed expects to receive approval from the Office of the Superintendent of Financial Institutions (OSFI) of its application to become a federally regulated deposit-taking institution.
"We believe that the application process is making progress, but the timing of any approval is entirely up to OSFI," Wahl said.
The 2009 loss included a previously announced writedown, $4.4 million after tax, on its interest in Xceed Mortgage Trust and an increased credit-loss assumptions, partially offset by a positive adjustment on its purchse price for Okanagan Funding Trust.
The 2009 results alo reflect a onetime payment of $4.8 million related to an adjustment of costs for the restructuring of asset-backed commercial paper and $1.4 million in interest earned on ABCP, even though it had been written off.

Organizations: Xceed Mortgage, TSX, Office of the Superintendent of Financial Institutions Xceed Mortgage Trust Okanagan Funding Trust

Geographic location: TORONTO

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