Commodity Market Diversifies And Stabilises WSE Group Results In H1 2012
• H1 net profit at PLN 60.2 million, down by 15.7% YoY
• Revenue from the financial market at PLN 108.3 million, down by 19.4%
• Revenue from the commodity market at PLN 23.9 million v. PLN 0.8 million a year ago
• Total sales revenue at PLN 134,0 million, down by 2.5%
• Operating profit at PLN 67 million, down by 7.3%
• EBITDA at PLN 81.6 million, down by 9.3%
• EBITDA margin at 60.9%, down by 4.6 percentage points
• ROE at 24.9%, up by 1.2 percentage points
• EPS at PLN 1.41
The Warsaw Stock Exchange Group generated a net profit of PLN 60.2 million in H1 2012, down by 15.7 percent year on year. The decrease of the profit was mainly caused by the global trend of subdued investor activity marked by a decrease of the value of trading on all stock exchanges in well-developed countries and on most emerging markets. The value of session trading on the WSE’s Main Market and NewConnect was PLN 97.8 billion in January-June 2012, down by 24% year on year. As measured by turnover in the local currency, this was one of the mildest decreases among Central and Eastern European exchanges.
“We are not overly concerned with the lower turnover on the equity market. We are part of the global financial system and follow the global trends. What is key is that just as we reported a higher growth rate of turnover than other European developing markets in 2011, we are less affected that the other markets this year. The bond market and commodity markets are becoming the WSE’s new brands. Combined with the fact that 42% of the total number of IPOs in Europe took place on the WSE in H1 2012, including IPOs of SMEs which are grappling with a capital shortage in many European countries, this paints a picture of a very effective and innovative exchange which serves well its roles in the economy. At the same time, we are heavily investing in infrastructure. Our capex budget for 2012 is PLN 93 million including the implementation of a new trading system,” said WSE CEO Ludwik Sobolewski.
The big number of IPOs on the WSE equity markets was coupled with a significant growth of the debt market. The number of issuers of non-Treasury bonds listed on Catalyst increased by 26% in H1 2012 and reached 125. The nominal value of non-Treasury bond issues in trading was record-high at PLN 45.9 billion at the end of June 2012, up by 14.9% year to date. The value of cash transactions in Treasury bonds and bills on Treasury BondSpot Poland increased by 56% year on year.
The aggregate revenue of the WSE Group from the financial market, which includes revenue from trading in equities and bonds, trading in derivatives, listing, and information services, totalled PLN 108.3 million in H1 2012, down by 19.4% compared to over PLN 134 million in H1 2011. The decrease had an impact on the total revenue of the WSE Group but it was partly offset as a result of the acquisition of the Polish Power Exchange (PolPX) closed in February 2012; thus, the total revenue decreased by only 2.5% to PLN 134 million.
The results of PolPX and its subsidiaries are part of the consolidated financial statements of the WSE since March 2012. As a result, the revenue of the Group from the commodity market increased from PLN 0.8 million last year to PLN 23.9 million in H1 2012.
“The WSE Group’s sources of revenue are now much more diversified and largely resistant to the volatility of the financial market. While the revenue from equity trading accounted for 56.4% of the WSE’s total revenue in H1 2011, its contribution was only 39.4% in H1 2012 and fell to 33.5% in Q2 2012, the first full quarter of consolidation of PolPX results. This means that the WSE’s growth strategy makes us resilient to market cycle shocks; as a result of the strategy, the WSE’s financial and business model makes the Exchange a stable part of the overall Polish financial system,” said Mr Sobolewski.
The commodity segment contributed 25.4% of the WSE’s revenue in Q2 2012 and 17.9% in H1 2012. Following the consolidation of PolPX, the WSE Group’s operating expenses increased to PLN 74.3 million, by 14.1% year on year; the WSE’s separate expenses decreased by 2.4% in H1 2012.