Reuters posts first loss since '84

LONDON, England (CNN) -- Reuters, the world's biggest financial news provider, has posted it first loss since floating 17-years ago, as it cut jobs, investment banks slashed spending and its electronic trading business made losses.

The London-based company, which has cut more than 2,000 jobs over the past year, made a first-half loss of £73 million ($115 million), or 5.2 pence share. That compares with a net income of £269 million, or 19 pence a share, a year ago.

Reuters, whose financial clients have cut more than 60,000 jobs since the beginning of this year amid the worst bear market conditions in 30 years, was forced to shed workers and reorganise its businesses at a cost of £156 million. That pushed the company to its first loss since listing in 1984.

Reuters and privately-owned Bloomberg provide financial news and market data to professionals in the financial sector. Reuters news and data reaches more than 558,000 desktops, many of them in financial institutions, including investment banks, brokerages and fund managers.

But those clients have seen their business virtually collapse as stock markets across the globe crash to five-year lows. Mergers and acquisition activity has slumped after the boom years of the '90s.

Investors, sapped of confidence, have dumped stock or decided to keep money out of the market until clear signs of a recovery emerge. That has pushed Reuters electronics trading unit Instinet into the red.

Instinet, which was floated in 2001 but is still 83 percent owned by Reuters, made an operating loss of £61 million.

Reuters made a pretax loss after costs of £88 million for the six months ended June 30, roughly in line with market forecasts. Revenues fell 5 percent to £1.8 billion, reflecting a 38 percent slide in revenues at Instinet.

"The combination of a steep revenue decline at Instinet and large restructuring charges across the group has resulted in a pretax loss for the first six months,'' Reuters Chief Executive Tom Glocer said in a statement.

"Nevertheless, the core Reuters business has performed resiliently. We expect market conditions to remain challenging, but we are taking the tough actions needed to protect our franchise, improve our competitiveness and position us for profitable growth when markets recover.''

Reuters shares, which have fallen more than 60 percent in the past year and underpreformed their European media peers by about 30 percent, stand at around nine-year lows at around 300 pence.