Disappointing investment results led to sharply lower second quarter earnings for Toronto-based Sprott Inc., the company said Thursday.
Net income for the three months ended June 30 was $0.7 million, or $0.00 per share, a decrease of 90.2% from $7.5 million, or $0.04 per share, in the comparable quarter of 2011.
Management fees during the quarter were $28.1 million, a decrease of 24.6% compared with a year ago.
Assets under management slipped to $8.5 billion as at June 30, compared to $9.3 billion as at June 30, 2011 and $9.7 billion as at Mar. 31, 2012.
Assets under administration dropped to $3.8 billion as at June 30, compared to $5.3 billion a year earlier.
Losses from investment losses totaled $4 million for the quarter, essentially the same as the quarter ended June 30, 2011.
Commission revenues for the quarter were $2.1 million compared to $4.9 million a year earlier.
“Our investment performance was disappointing through the first six months of the year and this negatively impacted our financial results,” Peter Grosskopf, CEO of Sprott Inc.
After the end of the quarter, Sprott finalized the acquisition of Toscana Capital Corp. and closed the acquisition of Flatiron Capital Management Partners.
“We continue to build our business and recently completed the acquisitions of Flatiron and the Toscana Companies,” Grosskopf added.
“Together, these transactions further diversify our investment capabilities and product offerings through the addition of top convertible arbitrage and energy yield specialists, allowing us to launch value-added yield products that are currently in high demand,” he said.
Sportt (TSX:SII) currently operates through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S. Holdings Inc.