European
digital asset investment firm CoinShares reported financial results for the second quarter of 2024 today (Tuesday), building on the momentum from Q1 and
announcing a special dividend following the successful recovery of its FTX
claim.
However, the
report indicates that FlowBank’s collapse negatively impacted the
company’s "principal investments," ultimately consuming the vast
majority of total revenues.
FlowBank Weighs on
CoinShares’ Q2 2024 Results
The company
posted asset management revenue of £22.5 million for Q2 2024, more than
doubling from £10.7 million in the same period last year. Total comprehensive
income surged to £25.8 million, up from £5.3 million in Q2 2023. Adjusted
EBITDA also saw significant growth, reaching £26.6 million compared to £11.4
million in the prior-year quarter.
The total
assets under management (AUM) of CoinShares at the end of June amounted to
£4.19 billion, down from the record level of £4.8 billion reported in the
previous quarter. However, these are still record values, exceeding the
previous records from the end of 2021.
"Our
consistent performance in Q2 demonstrates that our Q1 was not an outlier, but
the result of continued efforts. This underscores the benefits from our
restructuring and streamlining initiatives over the past two years,” Jean-Marie
Mognetti, CEO of CoinShares, commented on the results.
However,
the company reported a material write-down in its “principal investments”
portfolio due to the of Swiss digital bank FlowBank SA, which it has
elected to impair fully.
CoinShares and FlowBank
The
company’s total revenue consists of asset management activities, profits from
cryptocurrency investments, and the aforementioned principal investments. This
last category generated a loss of nearly £25 million, consuming all the revenue
provided by AUM.
In
mid-June, the company was informed that "the Swiss Financial Market
Supervisory Authority had opened bankruptcy proceedings against FlowBank."
A few days later, the company decided "to fully impair its investment in
FlowBank," resulting in an impairment charge of over £21.8 million.
The
company’s asset management business consolidated its leadership position in
Europe, with its European Physical ETP platform recording its third-best
quarter in terms of net flows. In the United States, CoinShares focused on
product development and initiatives for its recently acquired
Valkyrie business.
FTX Claims
On a
positive note, CoinShares completed the sale of its FTX claim at the end of
June, achieving a recovery rate of 116% net of broker fees, translating to a
return of £28.7 million. Following this recovery, the Board of Directors has
decided to pay a special dividend to shareholders amounting to £24.3 million.
"CoinShares’
balanced strategy aims to establish it as a unique and attractive long-term
investment in the crypto listed market, while strengthening its position as a
leader in digital assets,” added Mognetti. “The resolution of the FTX situation has been highly favorable for CoinShares."
The value of the special dividend represents 86% of the total funds received in respect of the sale. “It is to be distributed with the forthcoming regular dividend payment
scheduled for 3 October 2024,” the report concluded.
European
digital asset investment firm CoinShares reported financial results for the second quarter of 2024 today (Tuesday), building on the momentum from Q1 and
announcing a special dividend following the successful recovery of its FTX
claim.
However, the
report indicates that FlowBank’s collapse negatively impacted the
company’s "principal investments," ultimately consuming the vast
majority of total revenues.
FlowBank Weighs on
CoinShares’ Q2 2024 Results
The company
posted asset management revenue of £22.5 million for Q2 2024, more than
doubling from £10.7 million in the same period last year. Total comprehensive
income surged to £25.8 million, up from £5.3 million in Q2 2023. Adjusted
EBITDA also saw significant growth, reaching £26.6 million compared to £11.4
million in the prior-year quarter.
The total
assets under management (AUM) of CoinShares at the end of June amounted to
£4.19 billion, down from the record level of £4.8 billion reported in the
previous quarter. However, these are still record values, exceeding the
previous records from the end of 2021.
"Our
consistent performance in Q2 demonstrates that our Q1 was not an outlier, but
the result of continued efforts. This underscores the benefits from our
restructuring and streamlining initiatives over the past two years,” Jean-Marie
Mognetti, CEO of CoinShares, commented on the results.
However,
the company reported a material write-down in its “principal investments”
portfolio due to the of Swiss digital bank FlowBank SA, which it has
elected to impair fully.
CoinShares and FlowBank
The
company’s total revenue consists of asset management activities, profits from
cryptocurrency investments, and the aforementioned principal investments. This
last category generated a loss of nearly £25 million, consuming all the revenue
provided by AUM.
In
mid-June, the company was informed that "the Swiss Financial Market
Supervisory Authority had opened bankruptcy proceedings against FlowBank."
A few days later, the company decided "to fully impair its investment in
FlowBank," resulting in an impairment charge of over £21.8 million.
The
company’s asset management business consolidated its leadership position in
Europe, with its European Physical ETP platform recording its third-best
quarter in terms of net flows. In the United States, CoinShares focused on
product development and initiatives for its recently acquired
Valkyrie business.
FTX Claims
On a
positive note, CoinShares completed the sale of its FTX claim at the end of
June, achieving a recovery rate of 116% net of broker fees, translating to a
return of £28.7 million. Following this recovery, the Board of Directors has
decided to pay a special dividend to shareholders amounting to £24.3 million.
"CoinShares’
balanced strategy aims to establish it as a unique and attractive long-term
investment in the crypto listed market, while strengthening its position as a
leader in digital assets,” added Mognetti. “The resolution of the FTX situation has been highly favorable for CoinShares."
The value of the special dividend represents 86% of the total funds received in respect of the sale. “It is to be distributed with the forthcoming regular dividend payment
scheduled for 3 October 2024,” the report concluded.
