Compagnie Financière Tradition: First half of 2002

Compagnie Financière posted a consolidated turnover of CHF 433.9 million in the first half of 2002, a rise of 6.2% (1.5% in constant terms), compared with CHF 408.4 million a year ago. This relatively stable performance reflects strong growth in currency options, equity derivatives and commodities operations, while interest rate activities weakened during the period as low volatility negatively impacted interest rate markets.

 

Consolidated operating profit stood at CHF 38.5 million, down from CHF 54.1 million in the first half of 2001, resulting in an operating margin of 8.9% of consolidated turnover, against 13.2% in the first half and 7.4% in second half of 2001. This operating profit takes account of insurance payouts of CHF 6.0 million for lost earnings in 2001 in the wake of the September 11 attacks.

 

The overall decline in consolidated operating margin reflects a mixed performance among the Group’s different business sectors:

 

 HTS, a broker in equities, bonds and futures, was particularly hard hit in the first half, suffering the knock-on effects of plunging equity markets. Consolidated operating losses reached CHF 3.6 million against a consolidated operating profit of CHF 6.9 million in the same period a year ago.

 

 The contribution of TSH, a broker in money markets and interest rate derivatives, to consolidated operating profit fell to CHF 29.8 million against CHF 37.6 million in the first half of 2001. TSH had benefited from an exceptional climate for interest rate operations in 2001 on the back of the Fed’s successive rate cuts. This situation was reversed in 2002, however, as very low and stable interests rates across the board negatively impacted earnings on these markets, which dropped 8.1% in constant terms, and eroded operating profitability.

 

TFS, a broker in currency options, equity derivatives and commodities, contributed CHF 11.6 million to consolidated operating profit in H1 2002, compared with CHF 8.0 million in the first half of last year. This represents a rise of 44.3% on revenues up 15.9% on the back of improved operating ratios, and a reduction in the negative contribution of new activities launched during 1999-2000.

 

Compagnie Financière Tradition reported consolidated profit before tax of CHF 53.9 million against CHF 60.0 million in the first half of 2001. This result reflects the very strong rise in financial income to CHF 15.3 million from CHF 5.9 million a year earlier, including net capital gains of CHF 14.4 million on the securities portfolio, impacting Group share of net profit by CHF 3.7 million.

 

After taking a consolidated tax charge of CHF 25.0 million, consolidated net profit stood at CHF 26.5 million against CHF 35.3 million in the first half of 2001. Minority interests’ share of net profit was ahead 21.1% to CHF 8.6 million, on the back of the good showing from TFS.

 

Net profit - Group share stood at CHF 17.8 million against CHF 28.1 million in the first half of 2001, bringing the annualized return on consolidated equity to 18.9%.

 

Consolidated equity stood at CHF 228.1 million at 30 June 2002, CHF 185.4 million of which was Group share, for a consolidated net cash position and investment securities of CHF 162.7 million.

 

 

 

 

Lausanne, 19 September 2002

 

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