Moscow Exchange Announces Results For The Second Quarter Of 2013

29/08/2013

Moscow Exchange (MOEX) today announces its IFRS results for the three months ended 30 June 2013. Strong earnings were driven by growth across our highly diversified business, particularly by derivatives and money-market products.

KEY OPERATING AND FINANCIAL HIGHLIGHTS OF Q2 2013

  • Total trading volume across all markets up 31% YoY to RUB 120.8 trn.
  • Assets in custody increased to RUB 17.6 trn as of 30 June 2013 from RUB 17.3 trn as of
    31 March 2013.
  • Total operating income rose 21.0% YoY to RUB 6.30 bln.
  • EBITDA up 32.2% YoY to RUB 4.54 bln; EBITDA margin increased to 72.1% from 66.0% in Q2 2012.
  • Net profit increased 57.1% YoY to RUB 3.30 bln.

KEY CORPORATE HIGHLIGHTS

  • The date of complete migration to T+2 was announced as 2 September, when all stocks are to begin trading with this settlement. 30 August is to be last day of trading in these instruments with T+0 settlement.
  • Moscow Exchange deepened its partnership with Deutsche Borse: trading in five German single-stock futures will be launched in Moscow, while Eurex, the derivatives exchange of Deutsche Borse Group, is to launch trading in Rouble FX futures.
  • Polymetal International listed its shares on Moscow Exchange, becoming the first company incorporated outside Russia to trade in Moscow.
  • An ETF was listed on Moscow Exchange for the first time.
  • Trading in gold futures calendar spreads was launched. Futures on US Dollar-Japanese Yen and
    US Dollar-Swiss Franc currency pairs were introduced.
  • A new incentive programme for brokers was launched to boost share liquidity and broker activity.
  • US dollars are now accepted as collateral for trading.
  • The SPECTRA trading platform, which serves the Derivatives Market and Equity Market, was moved to the new state of the art M1 data centre.

Mr. Alexander Afanasiev, Chief Executive Officer of Moscow Exchange, said, "Strong operating and financial results in the first half of the year demonstrate that the strategic initiatives realized in recent months are in the right direction and focused on continued growth over the long term. For example, we are on track to complete the transition to T+2 settlement in the Securities Market, we launched a number of new products, and we have attracted several Russian companies incorporated abroad to list on our markets. We became more attractive to local and international market participants due to successful reforms of the domestic financial infrastructure as well as our openness to change and innovation."

Mr. Evgeny Fetisov, Chief Financial Officer of Moscow Exchange, added, "Our financial results were excellent in the quarter with a 57.1% YoY rise in net profit to RUB 3.30 bln, driven by a 21.0% YoY increase in total operating income while costs were controlled, declining 0.4% YoY. The largest growth line in income was again fee and commission income, which grew in every one of our business segments and was up 18.1% YoY and 15.0% QoQ to RUB 3.29 bln."

FINANCIAL HIGHLIGHTS

RUB, mln Q2 2013 Q2 2012 YoY Q1 2013 QoQ
Total Operating Income 6,303.2 5,207.4 21.0% 5,517.5 14.2%
Fee and Commission Income 3,287.9 2,784.0 18.1% 2,858.8 15.0%
Net Interest and Other Finance Income 2,994.5 2,408.8 24.3% 2,638.9 13.5%
Other Income 20.8 14.5 43.3% 19.8 4.8%
Operating Expenses 2,167.5 2,175.5 -0.4% 2,065.7 4.9%
Operating Profit 4,135.7 3,031.9 36.4% 3,451.8 19.8%
Net Profit 3,301.2 2,101.2 57.1% 2,562.4 28.8%
Basic Earnings per Share, RUB 1.49 0.98 51.6% 1.17 27.3%
           
EBITDA 4,544.5 3,437.7 32.2% 3,864.7 17.6%
EBITDA margin 72.1% 66.0% - 70.0% -

ANALYSIS OF Q2 2013 FINANCIALS

Total Operating Income. Operating income was up 21.0% YoY to RUB 6.30 bln. Revenue growth for the quarter was driven by an increase in derivatives fees & commissions, higher income on the FX Market and Money Market and higher interest income.

Securities Market. Fee & commission income from the Securities Market increased 11.9% YoY to RUB 739.2 mln. The total trading volume in Q2 2013 was up 17.6% YoY to RUB 6.3 trn. Equity volumes declined 31% YoY, though this was offset by an 87% YoY increase in bond trading. The equity market's total capitalisation was RUB 22.5 trn (US$ 684.4 bln) as of 30 June 2013.
Foreign Exchange Market. Fee & commission income from the FX Market increased 23.3% YoY to
RUB 636.9 mln, while its trading volumes rose 44% YoY to RUB 41.2 trn. Spot trading volumes remained practically flat YoY (due to lower exchange rate volatility), while FX swap trading volumes increased significantly, growing by 96% YoY on the back of higher demand for interest rates products. FX market income grew more slowly than trading volumes due to swap transaction fees being lower than spot transaction fees.
Money Market. Fee & commission income from the Money Market increased 38.1% YoY to
RUB 673.7 mln. The total trading volume, including repo transactions and the credit & deposit market, increased 30% YoY to RUB 58.5 trn. Interest rates remained high, and market participants, including the CBR, actively implemented repo transactions on Moscow Exchange.

Derivatives Market. Fee & commission income from the Derivatives Market increased 37.8% YoY to RUB 473.5 mln. The trading volume rose 22% YoY to 355 mln contracts, totalling RUB 14.8 trn. Open interest rose 29% YoY to 8.4 mln contracts at the end of Q2 2013. The main volume growth came from FX and RTS Index instruments.

Depositary and Settlement Services. Fee & commission income from depositary and settlement services increased 10.4% YoY to RUB 535.2 mln. The volume of assets in deposits at the NSD increased to RUB 17.6 trn as of 30 June 2013 from RUB 17.3 trn as of 31 March 2013.

Interest & Other Finance Income. Interest & other finance income increased 24.3% YoY to RUB 2.99 bln. This was due primarily to an increase in funds available for investment (averaging RUB 358 bln in Q2 2013) and interest rates remaining high. Interest & other finance income accounted for 47.5% of the Exchange's operating income.

Cash Position. The Exchange's own cash position totaled RUB 41.5 bln as of 30 June 2013. The Exchange had no material debt as of the end of Q2 2013.

Expenses. Operating expenses were down 0.4% YoY in Q2 2013 to RUB 2.17 bln. The major cost item was personnel, which grew 6.2% YoY. Other operating expenses decreased 5.7% YoY. Significant savings came from lower spending on rent and office maintenance (down 27.0% YoY toRUB 82.23 mln) and professional services (off 26.7% YoY to RUB 225.34 mln).

Capital expenditures were RUB 91.9 mln in Q2 2013 and totalled RUB 246.5 mln for the first half
of 2013.

The complete version of Moscow Exchange's consolidated IFRS financial statements for the three month ended 30 June 2013 is available at the Investor Relations section on our website.

***

INVESTOR ENQUIRIES MEDIA ENQUIRIES
Sergey Klinkov
+7 495 363 3232
ir@moex.com
Nikita Bekasov
+7 495 363 3232
pr@micex.com

NOTES TO EDITORS

About Moscow Exchange

OJSC Moscow Exchange MICEX-RTS ("MOEX") operates Russia's largest public trading markets for equity, bond, derivative, foreign exchange and money market products, as well as Russia's Central Securities Depository (CSD) and the country's largest clearing service provider, National Clearing Centre. At the end of 2012, it ranked among the world's top-20 exchanges for equity trading by market capitalization and among the top-10 for bond trading by trading volume and for exchange-traded derivatives by number of contracts traded. Moscow Exchange has 703 issuers listed on its securities exchange, including many of Russia's largest companies.

Moscow Exchange was formed in December 2011 as a result of a merger between Russia's two main exchange groups. The merger brought together MICEX Group, the oldest domestic exchange and operator of the leading securities, foreign exchange and money market platform in Russia, and the RTS Group, at the time the operator of Russia's leading derivatives market. This combination created a vertically integrated public trading market across most major asset classes. Following the merger the company became an open joint stock company (OJSC) and was named Moscow Exchange. Moscow Exchange completed an initial public offering of its shares on 15 February 2013.

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