UPDATE 1-Xceed Mortgage posts lower Q3 profit on restructuring
(Recasts, adds detail)
Sept 11 (Reuters) - Xceed Mortgage Corp (XMC.TO) said third quarter profit more than halved from last year, hurt by costs related to changes it made to its business model to counter a collapse of the asset-backed commercial paper market.
Xceed said net income for the quarter was C$1.6 million, or 6 cents a share, compared with C$6.5 million, or 22 cents a share in the same period last year.
The company said net income for the latest quarter included a C$900,000 writedown for the fair value of financial instruments.
Cash flow from operations was C$7.1 million, or 26 cents a share, compared with C$9.7 million, or 33 cents a share, last year.
Revenue fell about 55 percent to C$7.5 million, reflecting the reduced level of mortgage sales and lower securitization income.
The Canada-based mortgage lender said it is moving away from offering primarily non-traditional mortgage products to only originating business that qualifies for insurance and sale to the Canada mortgage bond program.
"This has resulted in a significant reduction in our business volumes and an effect on our profit levels as the margins on such mortgages are lower than previously realized for non-traditional offerings," Chief Executive Ivan Wahl said in a statement.
Since the turmoil began, the company's stock has fallen around 80 percent, it has laid-off around 100 employees, including its president and its chief financial officer, and has cut back on office space. ($1=1.074 CANADIAN DOLLAR) (Reporting by Krishna Chaithanya in Bangalore; Editing by Anil D'Silva) ((krishna.chaithanya@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging:krishna.chaithanya.reuters.com@reuters.net))
