March 10, 2011 / 11:40 AM / 7 years ago

CORRECTED-(OFFICIAL)-UPDATE 2-Xceed Mortgage cuts jobs, takes C$0.5 mln charge

(Corrects charges in headline, paragraphs 1 and 5 to C$0.5 million after company’s clarification)

* Says will not fully realize cost savings until Q2

* Q1 EPS C$0.00 vs year-ago loss C$0.42 (Adds details, share milestone)

March 10 (Reuters) - Canada’s insured residential mortgage provider Xceed Mortgage Corp said it cut close to half of its jobs and incurred about C$0.5 million in restructuring charges in the first quarter.

The company reduced its staff from 50 at the end of fiscal 2010 to 28 full-time staff in February, and said it will not fully realize the cost savings until the second quarter.

Toronto-based Xceed, which has about C$1.5 billion of mortgages and other assets under administration, last year asked that its application to become a federally regulated deposit-taking institution be put on hold to complete certain initiatives.

These included completing its transition to a prime lender and reduction of remaining mortgage balances in the various trusts to which the company sold mortgages.

The company, which has a market capitalization of C$22 million, said restructuring charges include C$0.5 million related to the job cuts.

For the first quarter, it reported net income of C$45,000, or break even per Canadian share, compared with a net loss of C$11.8 million, or 42 Canadian cents per share, a year ago.

The first quarter was also hurt by continuing tightness in the credit markets and related cost of financing mortgages, the company said.

Cash flow from operations was negative C$0.4 million, or 1 Canadian cent a share, compared with a positive C$0.6 million, or 2 Canadian cents a share, a year ago.

Xceed gave C$31.1 million in loans, compared with C$125 million in the year-ago quarter.

Shares of the company closed at 80 Canadian cents on Tuesday on the Toronto Stock Exchange. They have lost 11 percent of their value since the company reported fourth-quarter results on Jan. 13. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)

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