(Reuters) - Plus500 Ltd (L:PLUSP) reported on Monday a near three-fold jump in first-half core earnings as geopolitical events resulted in higher-than-expected market volatility, but the online trading platform cautioned that regulatory changes would hurt its revenue in the near term.
Plus500 has started a process to look at whether its long-time customers could be reclassified as professional investors, and retain the right to trade using higher leverage, it said in a statement.
The move comes as global regulators crack down on online trading platforms to address concerns that high-risk speculative products are being offered to retail investors, leading to losses.
Plus500 provides an online platform for retail customers to trade contracts for differences (CFDs), which are instruments that facilitate bets on moves in share prices without having to buy the underlying stock.
The European Securities and Markets Authority (ESMA) has banned 'binary' options sales to retail clients and restrict the sales of CFDs to shield investors from deep losses.
"It is unlikely that the exceptional performance of H1 2018 will be repeated and the impact of rule changes will potentially affect less than half of EEA (European Economic Area) revenues (30 percent of group revenues) in the short term," the company said in a statement.
The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped to $349 million for six months ended June from $118.5 million a year earlier.
Plus500, which is regulated in Britain, Australia, Cyprus, Israel, New Zealand, South Africa and Singapore, said trading in the third quarter had been in line with market expectations.
"Our expectations are that Plus500's outstanding momentum will deliver strong year-on-year growth in 2018, in line with the market expectations," Chief Executive Officer Asaf Elimelech said.
Plus500 added 94,148 new customers in the first half, up 75 percent from a year earlier. The number of active customers jumped 121 percent to 248,564 in the first half from a year earlier, while the average revenue per active user rose 12 percent to $1,873.
The Haifa, Israel-based company raised its full-year financial performance expectations twice in the last two months, saying it benefited from higher levels of market volatility stemming from U.S. import tariffs and high levels of trading in its cryptocurrency offering.