KUALA LUMPUR (Nov 30): Investment banking group K&N Kenanga Holdings Bhd slipped into the red in the third financial quarter ended Sept 30, 2015 (3QFY15) with a net loss of RM13.06 million or 1.8 sen per share, against a net profit of RM20.09 million or 2.74 sen a share a year ago, due to losses in its stockbroking, investment management, as well as money lending and financing segments.

Kenanga’s quarterly revenue declined 25.4% to RM125.37 million, from RM168.05 million a year ago.

The poor performance in 3QFY15 resulted in the group incurring a net loss of RM6.25 million or 0.86 sen a share for the nine month period ended Sept 30, 2015 (9MFY15), from a net profit of RM27.25 million a year ago, according to the announcement to Bursa Malaysia today. Its accumulative revenue dropped by 9.2% to RM400.87 million, from RM441.46 million in 9MFY14.

The group attributed its drop in revenue to a decline in brokerage fee income, which was a result of lower trading value on Bursa Malaysia; and lower management fee income from its investment management division, which was adversely impacted by volatilities and uncertainties in the market.

“There was also the inclusion a performance fee of RM23.2mil in 3QFY14, from termination of one mandate in 9M14,” said Kenanga.

As for its prospects Kenanga said amid the challenging economic outlook and competitive industry landscape, the group will continue to adjust and respond to market conditions accordingly.

“The group will continue to implement its business plans, including strategic alliances with foreign partners, to diversify its sources of revenue and it is also reviewing its overhead costs for cost saving opportunities,” it said.

Kenanga's share price was down 0.5 sen or 0.87% today to 57 sen, for a market capitalisation of RM411.85 million. The stock has declined 24% from its peak of 75.4 sen in May.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)