CTS Global profits drop amid volatile markets

Published May 24, 2022, 2:13 PM

by James A. Loyola

Listed stock brokerage firm CTS Global Equity Group, Inc. reported a 29.9 percent drop in net income to P20.1 million in the first quarter of 2022 due to weaker revenues.

In a disclosure to the Philippine Stock Exchange, the firm said revenues fell 56.7 percent to P38.4 million in the first quarter of the year compared to the same period in 2022 but was 68.1 percent higher than the previous quarter.

CTS Global

“Revenues decreased on lower trading gains from proprietary trading due to global equity market conditions,” CTS Global said.

Cost of services decreased by 66.8 percent to P14.5 million from the previous year, largely due to the decrease in commission expenses, personnel costs, and transaction costs for completing proprietary trading transactions.

Meanwhile, operating expenses, which are largely fixed in nature, also decreased by 21.0 percent to 6.0 million year-on-year. This pushed the net margins up from 32.3 percent in 2021 to 52.4 percent in 2022.

“For the first quarter of 2022, the main markets of CTS Global Equity experienced high market volatility,” the firm noted.

The benchmark indices of the United States, Hong Kong, and the Philippines exhibited first quarter returns of -5.2 percent, -6.0 percent, and +1.4 percent respectively.

In comparison to these benchmarks, CTS Global has returned 7 percent over the same period.

Breaking down the company’s revenues into the markets which it operates in shows majority of revenues coming from the Philippine market at 57.2 percent, while global trading revenues contributed 42.8 percent of total revenues.