Last year Leonteq was riding high on favorable market conditions. Now amidst more challenging conditions, the derivatives specialist revises its profit forecast.
Leonteq expects a pre-tax profit in the range of 20 to 30 million francs ($22.3 to $33.4 million) for the first half of this year, with net profit bolstered by positive tax effects, it said in a media release on Monday.
To date, its client business remained strong, booking a slight increase in commission and service fee income, helping counter subdued trading results mainly due to lower market volatility.
In a year marked by materially lower market activity, inflation, and interest rate hikes, normalized trading results saw positive but limited contributions from hedging and treasury activity compared to last year's very strong performance in «unprecedented market conditions.»
Revised Profit Outlook
In light of those developments, Leonteq is revising its full-year pre-tax profit outlook, expecting profits in a range of 40 to 70 million francs.
The upper end of the new range is the previous forecasts' lower range which had a high of 100 million francs, according to the report.
The company summed up the situation by saying «Despite the continued challenging market environment in the year-to-date 2023, Leonteq’s client franchise remained strong with a slight increase in net fee income year-over-year. The Group further recorded relatively stable platform assets and turnover year-on-year.»
