2023-12-01 11:08:07
Zurich (awp) – The Leonteq share was in complete disarray on Friday on the Swiss Stock Exchange, following the Zurich group’s reformulation of its annual objectives, barely a month before the end of the financial year, raising doubts regarding remuneration of shareholders.
The company now expects to close the 2023 financial year with a consolidated profit of between 10 and 20 million Swiss francs, while it was targeting a pre-tax profit of 40 to 70 million until now.
As a reminder, Leonteq had generated a net profit of 156 million Swiss francs in 2022, boosted by the extreme volatility of the markets in the wake of the outbreak of the war in Ukraine, while the pre-tax surplus had been established at 193 million.
Solid business, strong position
In its press release, the Zurich specialist in structured products mentions solid client activity “despite a difficult market environment” during the first eleven months of the year, as evidenced by an increase of more than a third in the number of products issued. and 12% of transactions compared to the same period in 2022.
Leonteq, which should publish its detailed annual results on February 8, is pleased to have maintained its “strong position on the Swiss market”, bringing its share of structured products listed on the Swiss Stock Exchange to 11%, compared to 8% a year ago. earlier.
In a context marked by inflationary pressures, geopolitical uncertainties and a marked decline in market volatility, the Zurich group achieved a normalized trading result, marked by hedging and treasury activities of around 30 million Swiss francs.
In terms of spending, annual investments have, as already announced, jumped by almost half to reach 30 million. As for the share buyback program launched at the beginning of April and which should end at the end of the year, nearly 395,000 shares were bought back, for a total value of 16.5 million Swiss francs. .
Dividend in question
In a note, the Zurich Cantonal Bank (ZKB) highlights that the median value of 15 million Swiss francs expected for annual profit translates into a gain of only 83 cents per share, even though Leonteq has set itself aims to pay a dividend of at least 2 Swiss francs per share for the 2023 financial year.
According to the cantonal establishment, if we take into account the net profit of 28.8 million Swiss francs generated in the first half, the second must result in a loss of at least 8.8 million, despite a tax effect positive. “This is undoubtedly the result of a combination of falling revenues and rising costs,” estimates the ZKB.
The least we can say is that the situation of the Zurich group was not fortunate enough to please investors. At midday, the Leonteq registered stock collapsed by 16.8% to 32.50 Swiss francs, following having briefly slipped below the 32 Swiss francs mark, its lowest level in more than three years, while the market as a whole (SPI) increased by 0.34%.
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