FRANKFURT (dpa-AFX) - Online broker Flatexdegiro is banking on better business in the second half of the year after weak months. A further significant improvement in margins is expected in the second half of the year, the company announced in Frankfurt on Monday evening. And CEO Frank Niehage expressed confidence that the recently weakening securities trading business will grow again in the future. On Tuesday Flatexdegiro also came up with a surprising departure: Vice President Muhamad Chahrour is leaving the company at the end of December - after only one year in his current position.

On the financial market the news were acknowledged on Tuesday with a price slide. The Flatexdegiro share lost around five percent in the morning and was thus one of the biggest losers in the small cap index SDax.

The surprising departure of board vice Chahrour happens according to the information at his own request. "Muhamad Chahrour's decision was unexpected for us," said supervisory board chairman Martin Korbmacher. "We are losing a long-time and loyal comrade-in-arms."

Chahrour, now 37, had only taken over the position of deputy CEO and head of day-to-day operations (COO) on Jan. 1. Previously, the German financial regulator Bafin had subjected the online broker to a special audit and found deficiencies in the organization and corporate governance. As a result, Flatexdegiro reshuffled its board of directors. Until then, Chahrour had been responsible for the company's finances for several years.

In the meantime, CEO Frank Niehage sees reason to believe that Bafin will recognize the improvements at Flatexdegiro. He said the company has now automated its objectionable credit mitigation techniques. He expects a decision from the authority and an easing of conditions in September, he said in a conference call Tuesday.

Noting the slump in securities trading since 2022, Niehage and Chahrour expressed confidence that current levels are not the new normal. The managers pointed to the general economic situation and the Russian war of aggression against Ukraine.

Meanwhile, the Management Board confirmed its forecasts for the current year. Accordingly, adjusted sales should continue to reach around 380 million euros. The adjusted margin for earnings before interest, taxes, depreciation and amortization (adjusted Ebitda) is expected to be over 40 percent. In the second quarter just ended, it was 37.4 percent, and in the first half as a whole it was only 33.7 percent.

In order to reach its goal, Flatexdegiro wants to spend above all less money on marketing. For example, the broker is ending its commitment as a shirt sponsor of the Spanish soccer club FC Sevilla this year. Compensation payments for employees due to high inflation will also not recur in the second half of the year.

At the same time, the online broker expects rising commissions from transactions processed by investors as well as higher interest income. Already in the second quarter, Flatexdegiro benefited strongly from the increased interest rates. The resulting income rose by almost 88 percent compared with the same period last year.

However, commission income slumped by more than 18 percent to EUR 52.7 million, with the result that total income from day-to-day business (adjusted revenue) rose by just under eight percent to EUR 90.8 million. The same applies to the number of new customer accounts: between the end of March and the end of June, it grew by only 2.50 million euros to 2.56 million euros.

At the same time, customers tended to hold back on securities trading in a year-on-year comparison. Transactions processed via the Frankfurt-based platform fell by 18.5 percent to 13.2 million in the second quarter. Flatexdegiro sees the reasons for this in geopolitical tensions, high inflation rates and rising interest rates, which influenced people's spending behavior. The company took in an average of 3.99 euros in commission per transaction, one cent more than a year earlier.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted Ebitda) reached 33.9 million euros in the second quarter, with growth of over 24 percent. In this figure, the company excludes effects from provisions for share-based employee compensation. Flatexdegiro set aside 4.8 million euros for this purpose in the second quarter. The share price has risen strongly since the beginning of the year, after it had continued to plummet last year.

According to analyst Mengxian Sun of Deutsche Bank, operating profit in the second quarter was lower than the market had expected. The broker's fee income is still dependent on market sentiment - and that shows no signs of a sweeping improvement, he said. The company plans to present its full half-year report on Aug. 22./stw/lew/mis