Warsaw Stock Exchange Group Financial Results for 2012
WSE Group’s consolidated results for 2012 (PolPX results consolidated as of March 2012):
- Sales revenues: PLN 273.8 million (+1.9% YoY)
- Operating profit: PLN 125.3 million (-6.3% YoY)
- Net profit: PLN 106.2 million (-20.8% YoY)
- EPS: PLN 2.52 (PLN 3.19 in 2011)
The revenues of the Warsaw Stock Exchange Group increased to a record-high level of PLN 273.8 million in 2012, an increase of 1.9% compared to 2011 driven by the WSE’s acquisition of the Polish Power Exchange (PolPX), Poland’s only licensed energy exchange, in 2012. As a result of PolPX consolidation as of March 2012, the revenues of the WSE Group from the commodity market increased from PLN 2 million in 2011 to PLN 62.6 million in 2012. For the same reason, the WSE Group’s operating expenses (PLN 148.5 million) increased by nearly 10.8%; however, WSE alone reduced its operating expenses by 7.0% to PLN 114.9 million.
The revenues from the commodity market contributed 22.9% to the WSE Group’s total sales revenues in 2012 and fully offset the more than 20% decrease in the Exchange’s revenues from the financial market, which stood at PLN 208.1 million. The lower results of the financial market segment were due to the global downtrend of turnover in equities and derivatives caused by the financial crisis. Total trading in equities on the WSE decreased by 24.3% and trading in derivatives by 27.1% in 2012. Despite the unfavourable environment, the WSE strengthened its position in the region of Central and Eastern Europe. The Warsaw Stock Exchange generated 54.2% of trading in equities in the region and accounted for 47.2% of the capitalisation of shares (50.1% and 44.2%, respectively, in 2011), and contributed 77.4% of trading in single-stock and index futures and options. The WSE was one of Europe’s most active IPO markets for another consecutive year. The total value of IPOs in Warsaw (EUR 731 million) ranked the WSE #5 among the exchanges operating on the most advanced European capital markets.
The key project of the WSE and the entire Polish capital market in 2013 is the implementation of the new trading technology including the new trading system UTP (Universal Trading Platform) supplied by the NYSE Euronext Group. The technology upgrade will ensure a much superior trading speed and remove practical limitations on the number of orders and trades handled in the system, thus creating conditions conducive to improved market liquidity and efficiency. Enhanced system parameters and functionalities will support more dynamic growth of different categories of instruments and improve the comfort for system users. In parallel to implementation of UTP, which will be available on the WSE as of 15 April 2013, the WSE will conduct programmes aiming to improve the liquidity of trading in equities and derivatives and open new segments of the derivatives market: stock options, Treasury bond and WIBOR futures, as well as cash-settled commodity derivatives.
“After a difficult year on the capital market, 2013 will bring many positive planned changes. I am certain that by working in the spirit of co-operation with market participants, we will achieve our goals, which include making different market segments more attractive to investors and issuers raising capital on the exchange. I expect the environment of the Exchange to propose new initiatives which we will jointly analyse and implement the best of them,” said Adam Maciejewski, President of the Management Board of the Exchange.
The WSE Group’s operating profit was PLN 125.3 million in 2012, a decrease of 6.3% compared to 2011, when the financial results generated by the Exchange were among the highest in history. A sharper decrease in the net profit (by 20.8% to PLN 106.2 million) was driven among others by a lower share of profit of associates and interest paid on debt following a change in the financing structure of the Exchange at the turn of 2011 and 2012.
“The acquisition of the Polish Power Exchange, which has allowed the WSE to largely diversify its sources of revenue and made us resilient to the trends on the financial market, was financed with an issue of five-year bonds in a total amount of PLN 245 million. The interest cost of the bonds is one of the lowest of any local corporate bonds (WIBOR 6M + 117 basis points), which confirms in market terms that the financial position of the Exchange is very strong,” said Adam Maciejewski.