Bermuda-based offshore investment firm Lines Overseas Management Holdings Ltd. posted a net loss of $725,000 in the first half of 2009, as revenues fell by more than a third.

The company said yesterday it had suspended its regular quarterly dividend "until conditions in the financial markets improve".

The loss compares to net income of $47,000 for the same period last year. In 2007, first-half profit was around $1.3 million.

In its half-year earnings statement, released via the Bermuda Stock Exchange yesterday, LOM said revenue lines had been flat or disappointing despite the recovery seen in the markets in the second quarter.

"It would be a bit unrealistic to expect significant general revenue gains until the economy gains some upward traction and that is unlikely to happen as long as home prices remain weak and job losses continue," the statement added.

LOM provides brokerage, asset management, and corporate finance services to its primarily high net-worth individual and institutional customers in over 75 countries around the world.

LOM said broking fees fell 31 percent to represent 53 percent of group revenues, while management and advisory fee revenues fell 22 percent.

Fees realised from corporate finance work declined to "almost nothing" in the first half of the year. Foreign exchange revenues fell 49 percent and the company was also hit by extraordinarily low interest rates, as net interest earnings declined 67 percent.

During the first half of the year, the company shed some four positions as it sought to cut costs.

This helped LOM to trim its employee costs by 15 percent and its overall operating expenses by 24 percent.

The company's assets under administration fell to $710 million as of June 30, 2009 — down from the $976 million from the prior year, but up from the $639 million in assets at the end of 2008.

LOM said it "remains in a strong financial position with net equity of $18.9 million and no debt".

The firm holds cash and equivalents of $4.6 million, representing 24% of net equity. As of June 30, 2009 LOM's book value was $3.01 per share. Yesterday, LOM Holdings Ltd.'s share price closed at $3.50.

"Global equity markets began 2009 under severe pressure and reached a nadir in early March.," LOM said in its earnings statement.

"Since then we have witnessed a strong recovery in global equity markets as stimulus actions around the world have held off the worst fears.

"Along with the recovery in the last three months we have witnessed stronger commodity prices and signs of a pick-up in business in the emerging markets.

"Cost cuts have helped second quarter profits of US corporations, however, revenue lines have been flat or disappointing."

LOM said revenues were down 37 percent year on year and the company plunged into the red during the first quarter.

"We again reduced staffing levels and these cost reductions fed through in the second quarter," the firm added. "Revenues picked up somewhat with the recovery in the markets and with the reductions in cost the group reduced the scale of losses to break even on a monthly basis by the end of the half year."

LOM said it will continue to buy back shares for cancellation to a total outlay not exceeding $500,000.

Over the first half of the year, the company purchased for cancellation 30,050 shares.