Bolsas Y Mercados Españoles obtains a net profit of €47.8 million in the second quarter

Bolsas Y Mercados Españoles Obtains A Net Profit Of €47.8 Million In The Second Quarter - It Represents A 42% Increase From The First Quarter Of 2009

31/07/09

  • Stripping out extraordinary revenues, quarterly net profit would have been 2.1% up on the first quarter.
  • From January to June BME’s net profit exceeded €81 million.
  • Revenue in the second quarter reached €90.9 million, up 9.4% from the same quarter in 2008.
  • EBITDA in the second quarter stood at €60.2 million, up 4.2% from the same quarter the previous year.
  • ROE improves from 37.3% in the second quarter 2008 to 39.4% in the second quarter of 2009.

Bolsas y Mercados Españoles (BME) recorded a net profit of €47.8 million in the second quarter, up 42.5% from the previous quarter and up 0.1% from the same quarter in 2008. Excluding the effect of extraordinary revenues, the net profit would have grown by 2.1% from the first quarter. The net profit for the first six months of the year totalled €81.3 million, that is, €0.98 earnings per share.

Revenue in the second quarter, which was €90.9 million, was 9.4% higher than the €83.1 million obtained during the same quarter of 2008. Revenue for the first half of the year totalled €163.7 million.

EBITDA for the second quarter grew by 4.2%, going from €57.8 million in the second quarter of 2008 to €60.2 million in the second quarter of 2009.

Return on Equity (ROE) in the second quarter stood at 39.4%, an improvement on the same quarter of the previous year, when it stood at 37.3% and better than the 27.6% recorded in the first quarter of 2009.

The efficiency ratio, which values the expenses incurred at each revenue source, remained virtually unchanged in the second quarter compared with the first, going from 33.7% in the first quarter to 33.8% in the second. The consistency of these efficiency levels, achieved by the company against such difficult financial and economic conditions as we face today, reflect the robustness and resilience of BME’s business model and consolidate it as a reference for the sector and the market.

EQUITIES

Revenue in the second quarter of 2009 from Equities was up 7.7% from the first quarter, at €30.9 million (-11.4%), which combined with a 7.3% cut in operating costs left EBITDA at €22.2 million, down 12.8% from the same period a year earlier.

The second quarter of 2009 showed a positive trend in equity activity levels in comparison with previous years. In comparison with the first quarter equity trading volume increased 28.1%, the volume of shares traded grew by 15.2% and the number of trades was up 2.5%. The number of shares that changed hands in the second quarter was up 14.2% from the second quarter of 2008, which demonstrates a sustainable level of trading activity and underlines the impact that the lower share price of Spanish companies had on turnover.

In the first six months, the trading volume reached €422.4 billion, down 40% from the first half of 2008. The number of trades posted in the first six months came in at 15,316,967, down 18.2% from the same period in 2008.

SETTLEMENT

Revenue in this area in the second quarter 2009 was down 11.5% from the previous year to €17 million, significantly less than the 33% drop posted in the first quarter. The €33 million in revenue reached in the first half were down 23.4% from the same period the previous year. After deducting operating costs EBITDA in the second quarter came in at €13.4 million, down 12.9% from the same quarter of 2008. EBITDA for the first half, at €25.9 million, was down 27.2% from the same period a year earlier.

At the end of the second quarter of 2009 the nominal amounts registered, including equities, private and public fixed income, grew by 12.9% from the same period a year earlier to €1.5 trillion.

Turning to the settlement of trades, in the second quarter of the year 8.6 million trades from the three markets were settled, which represent a 6.9% decline from the same period in 2008.

The number of transactions settled in the first half of 2009 came in at 16.7 million. This figure represents a 18.3% drop from the same period a year earlier.

LISTING

Revenue from this area in the second quarter increased by 0.2% compared with the same period last year to €7 million. Revenue in the first half was down 0.1%, at €14.1 million. EBITDA in the second quarter increased by 3.4% from the same period a year earlier to €4.3 million and in the first half it grew by 1.2% to €8.8 million.

The capitalisation of BME listed companies as at 30 June 2009 reached €897.9 billion, down 28.7% from a year earlier.

INFORMATION

The changes in this unit confirms the trend followed in the previous quarter in terms of the total number of end users who gained real-time access to information on the BME markets. Average access to the different information sources was down 22.9% from the first half of 2008, at 138,000 but the occasional-access volume increased by 122.6% from a monthly average of 3.1 million to 6.9 million. The number of clients hovers around the same level as that of the previous quarter, which represents a 6.2% increase compared with the first half of 2008.

As a result of these changes in the different access types and information levels, the unit ended the first half with a 9.4% drop in EBITDA compared to the same period a year earlier, at €14 million. Revenue decreased by 10% to €17.1 million, of which €8.3 million correspond to the second quarter, down 14.4% from the same period a year earlier.

DERIVATIVES

Activity levels in this unit picked up in the second quarter. The number of contracts traded grew by 23.4% in the first half from the same period a year earlier. In June the market posted a record high in terms of the number of contracts traded, at 13,527,495 contracts.

For this reason, the 1.6% decline in revenue in the second quarter constitutes an improvement on the 11.8% decline of the first quarter. At the end of the first half revenue decreased 6.9% from a year earlier to €13.3 million. After deducting operating costs, EBITDA in the second quarter reached €3.7 million, down 15% from a year earlier and in the first half it came in at €7.2 million, down 20.7% from the same period a year earlier.

The index derivatives segment showed a positive trend in terms of trading volume. In the second quarter Mini Futures reached a quarterly record high of 888,285 contracts, up 23.4% from the same period in 2008. The trading volume in the first half was 1.9% up from a year earlier. The derivatives on single stock segment maintained the high trading volume levels of the previous quarter with growth figures for the first half of 96.2% in Options on Stocks and 17.6% in Stock Futures, the latter posting their highest ever monthly trading volume in June, at 8,324,822 contracts.

FIXED INCOME

In the second quarter of 2009 trading volume in this unit was €1.2 trillion, up 89.5% from the same period in 2008. In the first half of the year the trading volume totalled €2.2 trillion, up 122.8% from the same period a year earlier.

Revenue in the second quarter came in at €1.6 million, down 2.4% from a year earlier and in the first half it totalled €3.1 million, down 5.6% year on year. EBITDA in the first half totalled €1.6 million and in the second quarter it came in at €778,000, with declines of 11.3% and 13.3% respectively.

IT & CONSULTING

Revenue in this unit in the second quarter reached €3.7 million, up 3.1% from the same period a year earlier and in the first half it totalled €7.6 million, a decrease of 0.9% from a year earlier. After deducting operating costs, which grew considerably due to the start of new projects, EBITDA at the end of the first half totalled €2.5 million, down 27.3% from the same period a year earlier.

In the second quarter there was a 24.9% increase in the total number of trades handled by Visual Trader’s order routing system in comparison with the same period in 2008. This growth compensated for the decline posted in the first quarter and led to a slight decrease in the number of orders handled of 0.5% in the first half. In relative terms, its share of the Spanish market has remained the same as in the first quarter of 2009.

In Consulting and Technology, the projects under development in the Ukraine and Colombia as well as the recent contract to design a securities market for SMEs in Mexico were all expanded, and a new financial-market-related development project was launched in Croatia (to be completed during 2009). At the same time the company, in conjunction with FINRA, will be organising a training course on compliance, which will take place in September 2009, and there are also negotiations underway to set up other training courses in Latin America.

BME continues to develop and market its business continuity services in line with the latest applicable legislation, and to run the SIBE electronic trading systems of a number of securities markets as per the agreements signed. BME Innova, meanwhile, continues with the development of its Financial Messaging project (BME Highway). This integrates into a single service all the possibilities identified at Spanish companies relating to the sending and receiving of financial messaging (statements, payment and collection, etc.).

At the end of the second quarter, 130 companies had signed up for the Integrated Reporting Service (IRS) that was launched during the first quarter. The traditional client base of market members has been complemented to a significant degree with other kinds of entities, such as venture capital firms, investment services companies, and collective investment and pension fund managers.

HIGHLIGHTS

BME agreed to pay the ordinary dividend in three instalments as of 2009: two interim dividends in September and January and a supplementary dividend in May following the General Shareholders’ Meeting. In this regard, on 30 July 2009 the BME Board approved the payment of a gross interim dividend of €0.40 per share to be paid on 10 September 2009.

Since July BME has headed the Regulation Committee of the World Federation of Exchanges (WFE). The Committee’s functions are, among others, to foster the stock exchanges’ relations with international regulatory agencies, such as IOSCO or the SEC, answer public consultations developed by these bodies for the reform of regulatory environments, coordinate the work carried out by the stock exchange’s legal divisions at an international level and study new trends in regulation, legislation and supervision of financial markets.

In July those securities that were still traded on the open-outcry market were moved to a new electronic trading system to boost their liquidity, increase their transparency, and improve accessibility.

Share trading to three decimal points began on 8 May with Jazztel. On 30 June, the Federation of European Stock Exchanges (FESE), of which BME is a member, reached an agreement with the London Investment Banking Association (LIBA) and the multi-lateral trading facilities (MTF) to harmonise minimum tick sizes. There are currently 80 securities trading to three decimal points.

New issues admitted to trading increased in the second quarter and early July while a new product in the warrants market was launched, Inline Warrants. In addition, the second quarter saw the listing of the Lyxor ETF Euro Corporate Bond, the ETF benchmarked to the IBEX 35® Inverso and Grupo Empresarial San José. Likewise, Grupo Financiero Banorte joined the Latibex and Zinkia Entertainments was the first company to be admitted to the Expanding Company Sector of the Alternative Equity Market (MAB).

On 29 June, as planned, Iberclear connected to the Link Up Markets infrastructure. This move forms part of the second stage of Link Up Markets’ launch. Link Up Markets has started to offer CSDs the possibility of connecting via the SWIFT network in order to offer their clients rapid settlement throughout the value chain.