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

Karthik Subramanian

Karthik Subramanian has been a professional trader and fund manager over the last 18 years. He is basically a software developer who made the transition to financial domain around 18 years back as the attractiveness of the financial markets proved too much for him. He lives in Chennai in India along with his wife and son. He began his career as a software developer in 1999 and then gradually moved into the financial industry as he began trading stocks in his pastime. He then moved into the financial markets full time and then shifted his focus to the FX markets due to the liquid nature of these markets. Since then, he has been trading FX diligently and his favourite pair are the EURUSD and EURJPY. Over the last couple of years, he has found blockchain to be of high interest and considering his background in software and finance, he has since assembled a team of highly talented developers who have since worked on a variety of projects like crypto exchanges and blockchain architecturing. Now, he balances his time between trading and commenting on both the FX and crypto markets. He has worked with many publications including FX Street and Finance Magnates, which has helped him gain experience and also recognition across the industry. He loves to write and this passion has helped him to reach out across the FX and crypto industry. Right now, he works on his pet projects in the FX and crypto industry and spends his time writing and managing his blockchain team and helping it to reach higher.

Plus500

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

August 14, 2018
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.”

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