Marex profit leaps after ED&F acquisition as expansion plans reap rewards
London-based commodities broker Marex Group more than doubled its pretax profit in the first half of the year as it reaped the rewards from its expansion plans.
Total trades completed climbed 166 per cent to 59m while the number of contracts cleared tripled to 312m. This helped revenue climb 86 per cent in the period to hit $1.2bn.
Pretax profit meanwhile jumped to $120.2m, up from $55.4m in the first half of last year.
The significant expansion came after its acquisition of ED&F Man Capital Markets in October last year. The deal has helped to boost its metals business and expand its global footprint with over 400 former ED&F employees joining Marex since the acquisition.
The ED&F Man acquisition also swelled Marex’s presence in Dubai and the US, with the US operation now rivalling the size of its historically dominant European business.
The results also reflect a boost from higher interest rates and the more normalised markets conditions in the commodity markets compared to the “exceptional volatility” seen last year.
Ian Lowitt, chief executive, 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.”
Marex said its “expanded global footprint, growing capital base and client-centric growth strategy” positioned it well for future growth. In particular it highlighted further investments to help its clients navigate the energy transition.
“We are set to have another exceptional year in 2023. I am confident that we can continue to deliver sustainable growth and build an even more diversified, resilient and dynamic firm,” Lowitt said.
The strong set of results will bolster speculation about a potential IPO for Marex, one of the world’s largest privately-owned commodities brokers.
A potential IPO was shelved back in 2021 due to market volatility, but after its last set of results in March Lowitt said “private equity does look to exit” – suggesting a deal might be in the offing.