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BURSA DE VALORI BUCURESTI SA - BVB

2018 Q1 financial results

Release Date: 5/9/2018 8:30:10 AM

IRIS Code: 23E79

 

FINANCIAL REPORT FOR Q1, 2018

The Bucharest Stock Exchange (BVB) closed the first quarter with a 12.4% increase in the BET index, the main index of the local stock market, which includes the 13 most traded companies, after reaching a level of 8,816 points at the end of March, maximum of the last 11 years. The increase registered by the Bucharest Stock Exchange is the largest among the main stock market indices in the European Union, according to Reuters, as only 9 European markets had main indices in the positive territory for the first three months of the year.

The trading activity recorded a significant increase in the first quarter of 2018. The total value of transactions on all markets exceeded RON 3.7 bn, up by 30% over the same quarter of the previous year.

On the regulated market were traded shares amounting RON 3.52 bn. The average daily traded value was RON 53.68 mn, an increase of 24% compared with the first quarter of the previous year.

The stock market capitalization of Romanian companies exceeded EUR 21.5 bn at the end of March 2018, while the capitalization of all listed companies on the regulated market of BVB came close to EUR 39 bn.

Compared to the same period of the last year, Central Depository performance in the first quarter of 2018 increased in local settlement operations, mainly due to the increase in volumes traded on the BVB (33% growth compared with the first quarter of 2017) and the growth of the managed portfolio (14% growth in Q1 2018 compared to Q1 2017 from RON 37.14 bn to RON 42.30 bn). Also, the revenues from the registry activity increased by 31% over the same period last year, increase due to the evolution of the incomes received from the services rendered to the issuers and due to the conclusion of the new registry contracts. Thus, the Central Depository's operating income increased by 21% over the same period last year.

The BVB Group recorded a 61% increase in consolidated operating profit in the first quarter of 2018 to RON 4.77 mn (1Q.2017: RON 2.96 mn) due to the significant increase in trading activity on the back of a very good start for the year.

The BVB Group's operating income grew by 29% in the first three months of the year compared to the same period of 2017, up to RON 11.90 mn (1Q.2017: RON 9.19 mn), mainly due to the increase in the total traded value on all BVB markets.

The operating revenues of the BVB Group increased by 29% in the first three months of the year compared to the similar period of 2017, to a level of RON 11.90 mn (1Q.2017: RON 9.19 mn) growth mainly driven by the increase in total value of transactions on BVB markets.

The revenues generated by BVB, representing the Group's trading segment, amounted to RON 8.13 mn in the first quarter of 2018 (excluding intra-group transactions), up by 35% compared with the first quarter of 2017 (1Q.2017: RON 6.03 mn).

Revenues from the Group's post-trading segment in the first quarter of 2018, respectively RON 2.64 mn (excluding intra-group transactions), increased by 17% compared to the same period in 2017, amid the increase in the trading activity of the BVB, which generated a 31% increase in local settlement revenues, as well as an 11% increase in income from the admission and maintenance of participants in the clearing-settlement system of custodians.

Consolidated operating expenses amounted to RON 7.13 mn, up by 14% compared with the first three months of the previous year (1Q.2017: RON 6.23 mn), well below the level of revenue growth. The increase of personnel expenses in the reporting period from RON 3.50 mn in Q1 2017 to RON 4.13 mn in Q1 2018 is mainly due to a new quarterly recognition policy for estimated expenses for benefits granted to personnel starting 2018, while in Q1 2017 no such expenditures were estimated. The implementation of the Stock Option Plan (SOP) approved by the General Shareholders Meeting in April 2017, allowed, in accordance with IFRS 2, to estimate the expense related to benefits granted in shares starting with the beginning of 2018. In Q1 2018, according to the 2018 budget, estimated expenses related to  benefits granted in shares according to the SOP and other expenditures were recorded, with the view to implement the remuneration policy for the management and the employees of the BVB during 2018. Increases were also recorded in the cost of services rendered by third parties, generated mainly by the increase in promotion expenses, but also in Other operating expenses, due to the increase in fixed asset depreciation expenses.

Financial income in the first quarter of 2018, up by 15%, was mainly attributable to interest on financial assets held in government securities and bank deposits reaching the amount of RON 0.67 mn (1Q.2017: RON 0.58 mn). The net financial income, in the amount of RON 0.21 mn, decreased by 53% (1Q.2017: RON 0.45 mn), amid the recording of losses from unrealized exchange rate differences, following the revaluation of  foreign currency financial instruments (USD) of RON 0.46 mn, compared to the same period of 2017 when the losses from unrealized exchange rate differences amounted to RON 0.15 mn.

Consolidated net profit in Q1 of RON 4.03 mn advanced by 42% compared to the net result obtained in the same period of the previous year (1Q.2017: RON 2.83 mn), with a net margin of 35%, 93% being generated by the Group's trading segment.

As a result of the decision of the General Shareholders Meeting of Sibex Depository as of February 15, 2018, to liquidate and delist the company, the financial information related to the subsidiary Sibex Depository SA (consolidated as of 29/12/2017 as a result of the absorption merger) was presented separately, as discontinued operations, in accordance with IFRS 5.

Financial and operating highlights

 

Consolidated financial performance – BVB Group (RON mn, unless otherwise stated)

 

 

 

 

 

 

1Q 2018

1Q 2017

Change (%)

 

 

 

 

 

 

 

 

 

Operating revenue

 

 

 

 

 

11.90

9.19

29%

Operating expenses

 

 

 

 

 

(7.13)

(6.23)

14%

Operating profit

 

 

 

 

 

4.77

2.96

61%

Net financial revenue/(expenses)

 

 

 

 

 

0.21

0.45

-53%

Profit before tax

 

 

 

 

 

4.98

3.41

46%

Profit from continuing operations

 

 

 

 

 

4.18

2.83

48%

Profit from discontinued operation

 

 

 

 

 

(0.15)

-

-

Profit for the period 

 

 

 

 

 

4.03

2.83

42%

Total comprehensive income

 

 

 

 

 

4.03

2.95

37%

EPS attributable to owners (RON/share)

0.4941

0.3623

36%

 

 

Profitability ratios (%)

 

 

 

 

 

 

1Q 2018

1Q 2017

Change (%)

 

 

 

 

 

 

 

 

 

Operating margin

 

 

 

 

 

40%

33%

-

Net margin

 

 

 

 

 

35%

31%

-

Return on equity

 

 

 

 

 

3.2%

2.6%

-

* Indicators based on consolidated financial results

 

Individual financial performance – BVB only, (RON mn, unless otherwise stated), including intra-group transactions

 

 

 

 

 

 

1Q 2018

1Q 2017

Change (%)

 

 

 

 

 

 

 

 

 

Operating revenue

 

 

 

 

 

8.21

6.11

34%

Operating expenses

 

 

 

 

 

  (3.82)

  (3.39)

13%

Operating profit

 

 

 

 

 

4.39

2.72

61%

Net financial revenue/(expenses)

 

 

 

 

 

0.16

0.40

-59%

Profit before tax

 

 

 

 

 

4.44

3.12

42%

Profit for the period

 

 

 

 

 

3.72

2.61

42%

 

 

Operating highlights, trading segment (RON mn, all markets)

Trading value

 

 

 

 

 

1Q 2018

1Q 2017

Change (%)

 

 

 

 

 

 

 

 

 

Shares, units, rights*

 

 

 

 

 

3,563

2,754

29%

Certificates

 

 

 

 

 

88

95

-8%

Fixed-income*

 

 

 

 

 

129

54

137%

Total

 

 

 

 

 

3,780

2,904

30%

Avg. daily value (shares)**

 

 

 

 

 

53.68

43.41

24%

* Including offers       **Value for the Regulated market

 

Operating indicators, post-trading and registry segments

 

1Q 2018

1Q 2018

Change (%)

 

 

 

 

No. companies with registry contract at CD

907

880

3%

No. procedures resulted from issuers’ corporate events

230

159

45%

Local settlement

 

 

 

Value of trades settled on net basis (RON bn)

8.84

6.53

35%

Value of trades settled on gross basis (RON bn)

1.20

0.88

36%

Settlements through T2S platform (euro)

 

 

 

Value of trades settled on gross basis (EUR bn)

2.01

-

-

 

 

Share statistics for BVB as parent company (RON, unless otherwise stated)

 

 

 

 

 

 

1Q 2018

1Q 2017

Change (%)

 

 

 

 

 

 

 

 

 

Closing price (e-o-p)

 

 

 

 

 

28.20

30.50

-8%

Weighted average price

 

 

 

 

 

28.54

29.91

-5%

High (intraday)

 

 

 

 

 

30.70

32.50

-6%

Low (intraday)

 

 

 

 

 

27.30

27.70

-1%

Total trading value (RON mn)

 

 

 

 

 

11.31

5.42

108%

Average trading value (RON mn)

 

 

 

 

 

0.18

0.09

112%

 

 

 

 



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