MOEX Q1 Net Profit
Moscow Exchange (MOEX) today announces its financial results for the first quarter (1Q) 2014 according to International Financial Reporting Standards (IFRS). Strong earnings growth was driven by fees and commissions generated by increased trading volumes across markets, particularly the Equity and FX Markets, as well as growth in the depository and settlement businesses.
KEY 1Q14 OPERATING AND FINANCIAL HIGHLIGHTS
· Total trading volume across all markets increased 43.69% YoY to RUB 120.468 trn.
· Total operating income rose 18.0% YoY to RUB 6.51 bln.
· EBITDA grew 14.6% YoY to RUB 4.43 bln; the EBITDA margin was 68.0% versus 70.0% in 1Q13.
· Net profit increased 23.72% YoY to RUB 3.17 bln; earnings per share (EPS) increased 23.8% YoY to RUB 1.45.
FINANCIAL HIGHLIGHTS
ANALYSIS OF 1Q14 FINANCIALS
Total Operating Income. Operating income increased 18.0% YoY to RUB 6.51 bln. Revenue growth for the quarter was driven by higher fees and commissions across all markets excluding fixed income, as well as an increase in income from depository & settlement services. The sale of MICEX-IT, the operator of an electronic marketplace, also contributed to strong operating income growth.
Securities (Equity & Bond) Market. Fee & commission income from the Equity Market grew by 28% YoY to RUB 451.8 mln as equities trading volumes increased 35.3% YoY to RUB 2.7 trn. The Equity Market”s total capitalisation was RUB 23.309 trn (US$ 663.35 bln) as of 31 March 2014. Fee & commission income from the Bond Market declined 33.9% YoY to RUB 216.2 mln as trading volumes declined 30.5% YoY to RUB 2.7 trn. Listing and other services fees declined 17.3% to RUB 35.1 mln.
Foreign Exchange Market. Fee & commission income from the FX Market increased 64.2% YoY to
RUB 799.5 mln, while trading volumes rose 95.4% YoY to RUB 53.8 trn. Spot trading volumes grew 60.8% YoY, while swap trading volumes outperformed with 121.6% YoY growth, driven by continued solid demand from customers for liquidity-management products.
Money Market. Fee & commission income from the Money Market increased 16.4% YoY to
RUB 579.8 mln. Total trading volumes, including repo transactions and the credit & deposit market, increased 20.3% YoY to RUB 46.7 trn. The Central Bank of Russia continued to use the exchange”s infrastructure to inject liquidity into the banking system, leading to 29% YoY growth of Repo transactions with the CBR, while Repo with the Central Counterparty remained in great demand, posting 58x YoY growth.
Derivatives Market. Fee & commission income from the Derivatives Market increased 20.7% YoY to RUB 433.7 mln. While trading volumes increased 25.6% YoY to RUB 14.5 trn (340.3 mln contracts), open interest rose 27.5% YoY to 12.32 mln contracts at the end of 1Q14. Fees and commissions growth was mainly driven by increased volatility and robust activity on spot markets over the quarter. Derivatives on FX grew by 72% YoY and comprised 43% of total trading volume on the Derivatives Market, while derivatives on indices comprised a further 49%.
Depository and Settlement Services. Fee & commission income from depository and settlement services increased 39.4% YoY to RUB 733.7 mln. The volume of assets in deposits at the NSD increased to RUB 22.3 trn as of the end of 1Q14, from RUB 21.76 trn as of the end of 2013, and averaged RUB 21.9 trn for 1Q14.
Net Interest & Other Finance Income. Net interest & other finance income was almost unchanged YoY, with a slight decline of 1% YoY and totalled RUB 2.6 bln. Funds available for investment averaged RUB 441.54 bln in 1Q14. Net interest & other finance income accounted for 40.0% of the Exchange”s operating income, down from 47.8% in 1Q 2013.
Cash Position. The Exchange”s cash position totaled RUB 48.1 bln as of 31 March 2014. The Exchange had no outstanding debt as of the end of 1Q14.
Expenses. Operating expenses were up 24.1% YoY in 1Q14 to RUB 2.56 bln. Staff costs remained the major cost item, up 29.9% YoY, driven mainly by a low-base effect as a result of the introduction of a new methodology for bonus accruals. Some bonuses for FY2014 were accrued in 1Q 2014, while similar expenses for the full year 2013 started to be reflected in financials in the second half of the previous year. Other operating expenses increased by 18.4% YoY, mainly driven by the impairment of intangible assets related to the Ukrainian business. Excluding this item, administrative expenses were almost unchanged thanks to cost savings advertising and marketing costs and professional services.
Capital expenditures were RUB 68.6 mln in 1Q14, of which RUB 40.5 mln was spent on software.
Source: moex
