Estonia headquartered forex broker and one of six operational companies in Admiral Markets Group, Admiral Markets AS, has published its financial results for the first half of the year, showing a harsh performance drop in H1 2014. It is suspected that the company has been losing market share to competitors such as IronFX, FXPro and XTB in some of its key markets.
The company reported a first-ever loss as net revenue for H1 2014 was a very disappointing negative 1,610,381 euros, compared to a net profit of 2,110,385 euros a year ago in H1 2013. Operating income for Admiral Markets AS also fell by 34% from 6,548,204 euros in H1 2013 to 4,299,808 euros in H1 2014. The company’s capital adequacy ratio dropped from 35.80% in H1 2013 to 17.92 in H1 2014, but Admiral Markets AS’ capital adequacy and solvency margin are both in excess of the statutory requirement.
Dmitri Laush, Admiral Markets Group’s CEO discussed the results with Forex Magnates:
Was this result forecasted by the company and what does it relate to?
The results were indeed forecasted by the company’s management. There is indeed a discrepancy with the last year’s results and we did predict that the market will be less volatile this year.Whilst many companies decided to cut their costs we decided to invest more into technology and our IT resources and client offering, that’s where the main difference is coming from. The new accounts will be available to our clients on the 6th of October.
You can see from our report that we have increased our IT costs two times, mainly investing in technology itself and new, more skilled personnel hiring 20 additional IT team members. Please also note that this report is only relevant to one operation company, Admiral Markets AS – which is considered to be the technological hub of the group, hence this situation is absolutely irrelevant to the groups figures.
Are there some one-time costs involved in this report?
Yes, indeed. We had to invest in the Equinix LD4 infrastructure and we made a significant contribution both last year and this year. Starting this October, our clients should experience an improved trading offering, we are also launching new account types that will suit even the most sophisticated traders. Not to mention our upgraded trade matching engine.
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How big of an effect has the low FX volatility period had on your business?
Not that big of an effect, as we firstly predicted it and secondly the second half of the year has started very well for us. We are looking optimistic towards the end of the year, safe in the knowledge we will increase our profits this year.
Are losses associated in any way to your market share?
Not at all, our market share has only grown, we are sure you may see it from our volumes. We have also experienced a growth in the client numbers by 10%.
How much mobile trading have you seen since the introduction of your solution?
The share of mobile trading has not changed and it is around 30% of all trades placed by our clients. Nonetheless, we did launch a mobile version of our intraweb – Traders Room, which makes our clients’ account operations more convenient.
What is your core regional source of volumes as of this time?
Admiral Markets AS has always focused on Europe and since the report is only for AS, the income generated mainly comes from Europe, nonetheless as a group, we really expect to soon see the increase of volumes from Australia, South Pacific Asia and Arabic region that we have just entered into with our UK entity business.
What are your expectations for the second half of 2014?
Admiral Markets AS is planning to double its revenues in the second half of the year and has already achieved 45% of the remaining figure.