Plus500 Reports Strong H1-2018 Results, Profits Tripled but Share Price Dropped by 7.5%

Asaf Elimelech, CEO at Plus500
Asaf Elimelech, CEO at Plus500

Plus 500, an international financial firm providing online trading services in CFDs has reported strong H1-2018 results which have tripled on the back of higher market volatility from geopolitical events that resulted in higher trading activities

The revenues in the first half of 2018 shot higher by 147 per cent to $465.5 million from $188 million in H1-2017 and Net Profits almost tripled to $261.6 million. The better than expected performance was due to higher market volatility resulting in higher trading activities and popular cryptocurrency derivative in the first quarter.

When the performance is compared on a quarterly basis, the Revenues for the company reported a whopping 43 per cent drop compared to a previous record-breaking quarter in which it generated $297 million in Revenues and EBITDA of $237 million. The Q2 Revenues were recorded at $168 million and EBITDA at $111 million. The trading activities cooled down in the second quarter but were still strong on the basis of historical performances.

Despite strong financial performance by the company, shares of the company dropped 7.5 per cent as the management warned that the exceptional H1-2018 performance is not going to be repeated anytime soon. 

“It is unlikely that the exceptional performance of H1 2018 will be repeated and the impact of rule changes will potentially affect less than half of EEA (European Economic Area) revenues (30 per cent of group revenues) in the short term,” the company said in a statement.

On the top, the new regulatory crackdown from the European Securities and Markets Authority (ESMA) that has banned ‘binary’ options sales to retail clients and restrict the sales of CFDs to protect small investors from losses is also going to affect the revenue in the next few quarters. According to the statement by Plus 500, it has started contemplating whether its long-time customers should be reclassified as professional investors in order to provide higher leverage on CFD products.

During the first half of 2018, Plus 500 has added 94,148 new customers, a growth of 75 per cent from a year earlier. Also, active customers jumped 121 per cent to 248,564 in the first half from a year earlier. Average revenue per active users also rose 12 per cent to $1,873. 

Asaf Elimelech, Chief Executive Officer of Plus500, commented:

“We have had a very successful first half with two major milestones; another record set of first-half results including an exceptional first quarter performance and completion of our move up to the Main Market. The strong financial performance has enabled us to declare a very significant increase in shareholders returns by declaring a generous interim dividend”

“We have also made strong progress with our international diversification, within and outside the EEA, driven by our strong brand and new licences – Plus500 is now the biggest CFD Broker in the UK, Germany, Spain and Australia according to Investment Trends,9 we grew our Active Customers in Australia fivefold and started operating in Singapore.”

“Plus500 has implemented the recent regulatory changes and we anticipate an increased number of EPCs within European jurisdictions, complementing our growing activity outside the EEA.”

“Overall, our expectations are that Plus500’s outstanding momentum will deliver strong year-on-year growth in 2018, in line with the market expectations.”