Financial results of the WSE Group in Q1 2014:
- Sales revenue: PLN 86.5 million, an increase of 9% year in year.
- Revenue on the financial market: PLN 56.0 million, an increase of 6.5% YoY
- Revenue on the commodity market: PLN 30.1 million, an increase of 15.1% YoY
- EBITDA: PLN 53.0 million, an increase of 3.2% YoY
- Net profit: PLN 37.6 million, a decrease of 10.6% YoY
- EPS: PLN 0.9 (PLN 1.0 in Q1 2013)
In Q1 2014, the Warsaw Stock Exchange Group earned a record-high sales revenue of PLN 86.5 million, an increase of 9% year on year. The increase was driven both by an improvement on the financial market and a good quarter on the commodity market.
On the financial market, WSE’s business parameters and revenue of all key business segments improved. The trading revenue stood (PLN 39.8 million, +4.2% YoY) increased mainly due to higher revenue on trade in equities (+8.1% for session trades) and WIG20 futures (+4.8%). The growth of listing revenue (PLN 6.3 million, +10.4%) was driven by higher stock prices than last year as well as issues of stocks and bonds at more than PLN 2.1 billion by WSE-listed companies in Q1 2014. The acquisition of new data vendors and subscribers resulted in a higher revenue on information services (PLN 9.8 million, +14.4%).
“We launched in practice in Q1 the High Volume Provider programme which supports liquidity on the equity and derivatives market. The first member of the programme executed more than PLN 1.1 billion of transactions in February and March. We expect that the reduction of post-trading costs including the planned introduction of securities netting will have a very positive impact on interest in the programme and the liquidity of trading,” said Adam Maciejewski, CEO of WSE.
Revenue on the commodity market increased by 15.1% year on year to PLN 30.1 million in Q1 2014, which represented 34.8% of the total sales revenue of the WSE Group. This was the highest share in history and was driven by an increase of trading revenue (in particular on trade in electricity and property rights) by 35.8% to PLN 16.1 million.
“We are focusing our efforts not only on improving liquidity but also on further diversification of business and reinforcement of confidence in the market. The results in all these areas are increasingly strong although the external conditions are very challenging. We pursue with determination the goals of the strategy WSE.2020 including continuation of initiatives aiming to consolidate the markets of the region. We are actively engaged in the preparation of the Polish capital market development programme co-ordinated by the Ministry of Finance. It should result in better use of the opportunities offered by the capital market in providing funding for economic growth including young and innovative companies as well as more active conversion of savings into capital,” said Adam Maciejewski.
The record-high consolidated revenue was accompanied by an increase of EBITDA by 3.2% year on year to PLN 53 million. The net profit decreased by 10.6% to PLN 37.6 million. The year-on-year decrease of the net profit resulted from higher financial charges related to the trading system UTP implemented in April 2013. Among others, depreciation and amortisation increased by 95.4% to PLN 7.2 million.
The WSE Group’s total operating expenses increased by 19.2% year on year and stood at PLN 43.9 million in Q1 2014. Along with higher depreciation and amortisation, this was also driven by a higher cost of financial market supervision. Fees paid to the Polish Financial Supervision Authority (KNF) increased by 19.6% year on year and stood at PLN 5.2 million. External service charges also increased by PLN 3.2 million to PLN 9.7 million including in particular higher expenses for the development projects implemented by WSE and PolPX.
In Q1 2014, WSE initiated a project of creating a rating agency to strengthen the national financial safety net and the stability of the financial system in order to enhance the attractiveness of the exchange market to issuers and investors. The idea has met with broad support of financial market participants including the Polish Financial Supervision Authority.
“Along with the NewConnect reform, the solution to the penny stock problem, the review of corporate governance rules currently underway and a number of educational projects we are running, the Analysis and Rating Institute should be an important pillar strengthening the credibility of the market. From the perspective of sustainable growth of the Polish economy, creation of a local rating agency will not only make the local capital market more credible to investors but it will first and foremost create conditions for raising long-term financing of infrastructure projects and companies. An equally important part of the activity of the Institute would be to provide a broader analytical coverage of small and medium-sized companies,” said Adam Maciejewski.
PRESENTATION OF RESULTS OF WSE GROUP IN Q1 2014