CTS Global income up in H1 on strong forex earnings

Veteran stockbroker Edward K. Lee’s CTS Global Equity Group Inc. said its profit rose in the first semester of the year, with strong foreign exchange earnings offsetting the steep drop in its main international trading business.

From January to June, CTS Global recorded a net income of about P50 million, up 73.6 percent versus the same period last year.

CTS said this was driven by the P44.9 million earned by betting on the rally of the US dollar.

Earnings were thus propped up even as total revenue during the period fell 41.1 percent to P61.4 million amid the turmoil in the global and domestic equities markets.

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“Various catalysts including the Russia-Ukraine war, rising inflation, and recessionary fears have caused the equity markets to tumble,” CTS Global said.

International trading revenue fell 53 percent to P28.3 million. Local trading revenue was also down 45.7 percent to P20.2 million.

Its costs dropped by nearly 43 percent to P32.2 million on lower commissions paid to its traders.

“Margins expanded due to a leaner cost structure and foreign exchange gains,” CTS Global said.

Net margins at the end of June surged to 81.2 percent from 27.4 percent last year.

CTS Global went public last April, raising P1.37 billion to ramp up its global trading business.

The company said on Tuesday commodity price increases and rising rates have influenced its strategic investments this year.

“Apart from scaling global trading operations, portions of the IPO proceeds were allocated to Indonesia, a commodity-driven economy, and to government securities to capitalize on the rising rates,” CTS Global said.