By Toby Sterling
AMSTERDAM - Flow Traders NV, best known for market making in exchange-traded products (ETPs), on Thursday reported 2021 net trading income of 384 million euros ($439 million), in line with expectations, and said it was becoming a significant player in European crypto ETPs.
Shares in the Dutch firm, which had been up 4% in the year to date, were down 12% at 29.60 euros by 0852 GMT as it said it would reduce its dividend payout ratio in order to invest more in growth.
Analysts had seen full year trading income at 385 million euros after 933 million in 2020, according to Refinitiv data.
Flow Traders benefits from market volatility and had windfall profits during the onset of the COVID-19 pandemic in March 2020.
The company said fixed operating expenses would rise by up to 15% in 2022 as it seeks to broaden its areas of expertise, targeting fixed income markets and single bond market making, in addition to crypto and digital assets.
The company's business in the U.S., its second market after Europe, "continued to be disappointing with record low revenue captures partially due to Flow's aggressive pricing strategy to capture market share", ING analysts wrote in a comment on the earnings.
The bank had downgraded Flow's shares from Buy to Hold ahead of the results.
The company also engages in off-exchange trading with institutional investors.
It has begun making markets in cryptocurrency ETPs, which have been listed on Switzerland's SIX exchange and Deutsche Boerse's Xetra, among others, and said on Thursday it now had a 45% market share among 125 crypto ETP listings in the Europe, Middle East and Africa (EMEA) region.
Flow competes with privately-held Optiver, also of Amsterdam, and larger players such as U.S. firm Virtu Financial. ($1 = 0.8755 euros)
