Financial Results at the End of a Difficult Quarter Allow WSE to Focus on Strategic Initiatives

  • Net profit: PLN 25.9 million, down by 32.0% year on year
  • Operating profit: PLN 31.3 million, down by 8.4%
  • EBITDA: PLN 37.4 million, down by 10.3%
  • Revenue from the financial market: PLN 49.9 million, down by 27.7%
  • Revenue from the commodity market: PLN 14.8 million v. PLN 0.4 million a year ago
  • Sales revenue: PLN 65.7 million, down by 6.8%
  • EBITDA margin: 57.0%, down by 2.3 percentage points
  • ROE: 21.4%, down by 4.0 percentage points 
  • EPS: PLN 0.61

In Q3 2012, the Warsaw Stock Exchange Group reported a net profit of PLN 25.9 million, a decrease of 32.0% compared to Q3 2011 which was marked by one of the highest net profits in the history of the Exchange. The relatively smaller decrease in the operating profit (down by 8.4%) and EBITDA (down by 10.3%) express the change in the funding structure of the WSE implemented over the last 12 months accompanied by a significant expansion of the sources of revenue owing to the acquisition of the Polish Power Exchange and the continuous development of the Group’s offer.

The WSE operates trading in financial instruments and commodities within two business lines, generating revenues on eight markets in total. This scope of operation, which is expanding both through acquisitions and organic growth of the existing offer for investors, makes the structure of our business model similar to those global exchanges which are perceived as leaders in this regard,” said Ludwik Sobolewski, President and CEO of the WSE.

In the environment of lower turnover prevailing on the global financial markets for 12 months, the WSE performs relatively well compared to European exchanges. The turnover on the WSE equities markets in Q3 2012 was down by 33% year on year in Q3 2012, the same as the turnover on all EU equities markets in that period, while the turnover on small and mid-sized EU exchanges fell by 40%. As a direct consequence of this competitive dynamics, the WSE’s share in equities trading on the EU’s small and mid-sized exchanges increased considerably and reached 43% in Q3 2012. Within the WSE Group, the negative dynamics on the equities market was accompanied by a growing value of cash transactions on Treasury BondSpot Poland and a record-high value of the issue of non-treasury bonds listed on Catalyst, as well as a seasonal decrease in volumes on the Property Rights Market and in the Register of Certificates of Origin (PolPX).

Against the backdrop of these trends, the WSE Group’s total quarterly sales revenue decreased by only 6.8% compared to the record-high Q3 2011 and reached PLN 65.7 million. Similar to the previous quarter, the reduction of revenues from the financial market was largely offset by revenues from the commodity market, which increased by PLN 14.4 million year on year. The reduction of the net profit was driven by a negative result on financial operations (-PLN 1.2 million) due to WSE bond payments as well as a reduced share in profits of associates (PLN 2.0 million).

The Group’s operating expenses increased by 2.5% year on year in Q3 2012 due to the take-over of control over PolPX. At the same time, the WSE’s separate operating expenses decreased by 11.7% year on year in Q3 2012.

The rational cost management policy is the WSE’s lasting response to external challenges which the company and the European capital market are facing. It allows us to safely implement key initiatives arising from the WSE’s strategy including mainly the final phase of implementation of the new trading system and, on the commodity market, launching a gas exchange and, in the longer term, a market of auctions and secondary trading in CO2 emission allowances,” added Ludwik Sobolewski.

In Q3 2012, the WSE paid out a dividend of PLN 60.4 million in total, corresponding to 49.9% of the separate profit of 2011 (PLN 1.44 per share). In line with earlier announcements of potential increase of the investment in the Polish Power Exchange, the stake of the WSE in the share capital of PolPX increased from 91.34% to 98.17%.

Results of the activity of the WSE Group in Q3 2012:

Quarterly report