Flow Traders Ltd. announces its unaudited 3Q 2024 trading update.

Highlights

 Flow Traders recorded Net Trading Income of €107.3m and Total Income of €114.6m in 3Q24, compared to €67.6m and €67.7m, respectively, in 3Q23.

 Flow Traders’ ETP Value Traded increased 9% in 3Q24 when compared to the same period last year.

 Total Operating Expenses were €64.0m in 3Q24, compared to €55.3m in 3Q23, with Fixed Operating Expenses of €45.3m in the quarter, compared to €47.6m in 3Q23 (including one-off expenses).

 EBITDA was €50.5m in 3Q24, generating an EBITDA margin of 44%, compared to €12.4m and 18%, respectively, in 3Q23.

 Net Profit was €37.5m in 3Q24, yielding a basic EPS of €0.87, compared to a Net Profit of €6.3m and EPS of €0.15 in 3Q23.

 Trading capital stood at €668m at the end of 3Q24 and generated a 58% return on trading capital1 , compared to €624m and 56% in 2Q24.

 Shareholders’ equity was €666m at the end of 3Q24, compared to €638m at the end of 2Q24.

 Flow Traders employed 646 FTEs at the end of 3Q24, compared to 635 at the end of 2Q24.

Market Environment

Europe

Equity trading volumes in the quarter increased when compared to the same period a year ago but declined when compared to last quarter. Market volatility, on average, was roughly flat compared to the same period a year ago and increased compared to last quarter. Fixed Income trading volumes increased compared to the same period a year ago but declined compared to last quarter.

Americas

Equity trading volumes in the U.S. increased when compared to the same period a year ago but declined when compared to last quarter. Market volatility in the U.S. increased when compared to the same period a year ago as well as last quarter. Fixed Income trading volumes in the U.S. increased both when compared to the same period a year ago as well as last quarter. Volatility declined when compared to the same period a year ago but increased when compared to last quarter.

Asia

Equity trading volumes in Asia increased across the region (Japan, Hong Kong, and China) both when compared to the same period a year ago as well as last quarter. Market volatility was mixed across the region as volatility increased both year-on-year and quarter-on-quarter in Japan but declined both year-on-year and quarter-on-quarter in Hong Kong and China.

Digital Assets

Within Digital Assets, which trades across regions on a 24/7 basis, trading volumes in Bitcoin (the barometer of the industry) declined when compared to the same period a year ago but increased compared to last quarter. Volatility, as indicated by the BitVol index, remains higher than the same period a year ago but declined when compared to last quarter.

Trading Capital Expansion Plan

In recent years, Flow Traders has successfully diversified its core trading model across different asset classes and geographies, which resulted in increased optionality for the business. The Board sees a range of emerging opportunities to accelerate growth for the firm by systematically expanding its trading capital base.

At the last results update, the Board declared a suspension of the dividend and announced a €25 million bank term loan as the first steps in boosting the firm’s trading capital. The additional capital immediately helped increase the capacity of the firm to capture the opportunities that arose during early August given the significant spike in volatility and dislocation across financial markets around the world. Looking ahead, the Board will look for the most economical debt financing options to further expand the firm’s trading capital to accelerate the firm’s growth.

Completion of Share Buyback Program

€2.2m worth of shares were repurchased during the quarter. This completes the €15m share buyback extension program originally announced on 27 October 2022, of which the period of execution was announced on 28 July 2023 to be extended by 12 months to 26 October 2024. The total number of shares purchased under the program was 850,882 shares, with an average price of €17.63, and represents 1.9% of total outstanding shares.

Outlook

Fixed operating expenses guidance for the year remains unchanged and is expected to be in the same range as FY23 as headcount is expected to be roughly flat for the year, offset by continued technology investments and inflationary pressures.

The full results can be read here.

Source: Flow Trading