FXOpen UK, an ECN foreign exchange (forex) broker, has published its financial results for the year ended December 31, 2018, this Thursday. Difficult market conditions proved to be increasingly challenging for the firm, as it reported a significant drop in turnover and an overall loss for the year.
For the 12 months ended December 31, 2018, turnover for the broker was £351,481. This is down significantly from the previous year, which had a turnover of £1.39 million, by around 75 percent.
Breaking down turnover for the broker, which is regulated by the Financial Conduct Authority (FCA), the amount of turnover generated from the EC Commission was £162,381 in 2018. This is slightly less than the £213,371 in 2017.
Non-EC Commission, however, was down considerably in 2018, coming in at £189,100. Specifically, this is down by 83.9 percent from the more than £1.17 million achieved in the previous year.
Although the cost of sales was lower in 2018, coming in at £137,941 in 2018 as compared to £439,803 in 2017, gross profit still fell by 77.5 percent year-on-year to reach £213,540, down from £949,310 in 2017.
Overall, this weak financial performance resulted in the company reporting a loss for the year of £347,992. This is in contrast to the £391,545 in profit the FX broker achieved in the previous year.
ESMA Measures Hurt FXOpen UK in 2018
According to the report, the weak financial results were due to difficult market conditions. Specifically, it says: “The results for the year and the financial position at the year end represent tough market condition. During the course of 2018, the company maintained its client base in European and non-European market."
“Turnover decreased substantially in mid 2018 and in total, as compared to 2017, reflecting the new margin rules applicable to the retail clients, introduced by the European Securities and Markets Authority (ESMA). The board is focused on expand its client base, professional and retail.`"
