Marex doubles net profit as revenue surges 86pct
London-headquartered commodities broker Marex posted record revenues in the first half of 2023 as strategic investment across its global franchise has positioned the business to outperform in favourable market conditions.
The commodities boom has fueled stellar results for the market making and execution segment, and also boosted volumes for the clearing business. Clients’ activity at Marex, which connect its traders to commodity, energy and financial markets, has surged even more since Russia’s invasion of Ukraine.
Although that pressures the broker to maintain higher cash reserves, clients’ monies leapt to $11.8 billion by 30 June 2023, up 48 percent from $8.0 billion a year earlier. Total trades executed also jumped by 166% to 59 million and contracts cleared 203% to 312 million.
Marex said net revenue was up by an 86% YoY coming in at $619 million due to “supportive market backdrop” with increased volatility. This compares to $334 million in 2022.
Pretax profit in H1 2023 more than doubled from the previous year to $120 million, compared to $56 million in the same period a year ago and $122 million for the whole FY 2022, reflecting organic growth and higher interest income.
Rising energy and commodity prices lifted performance in the first semester with economies reopening after pandemic lockdowns, but market conditions normalised in the second quarter amid higher interest rates, the broker notes.
Ian Lowitt, Marex CEO, commented: “We have delivered exceptionally strong performance in the first half of 2023, reflecting the strength and scalability of the diversified global platform we have built, which provides our growing client base with essential market connectivity and quality service. I am very proud of what the Marex team have delivered, both operationally and commercially so far this year. Our goal is to build a diversified global platform which allows us to do more business with each of our clients, and our improving margins and returns demonstrate the effectiveness of these platform economics.”
Other business highlights show that Marex completed the acquisition of rival ED&F Man Capital Markets to boost its metals business and expand in fixed income and equities across the UK, US, the Middle East and Australia. It added that the integration is progressing well as the company onboarded over 400 former ED&F Man Capital Markets employees.
Marex said these deals represent a superb opportunity of corporate backing and consolidation with a worldwide growing leading player. It should therefore pave the way for future ambitious business development steps by benefiting from access to Marex’s global infrastructure and balance sheet.
