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Earnings after tax for the year amount to ISK 43.6 million as compared to ISK 31.0 million for 2002. At year-end, own equity was ISK 256.8 million (ISK 227.6 million at year-end 2002) and the equity ratio 76% (69% in 2002). Operating revenues increased by 16% over the previous year, or from ISK 459.2 million to ISK 532.6 million. Operating expenses for the year were ISK 483.0 million as compared to ISK 423.9 million in 2002, with the increase thus amounting to just under 14%.
In 2002 the holding company Eignarhaldsfelagid Verdbrefathing hf. was established for the operations of the Iceland Stock Exchange Ltd. (ICEX) and the Icelandic Securities Depository, with the intention of increasing the cost-efficiency of the two companies? operations and increasing co-operation between them. The two companies operate as separate units.
Operating conditions in 2003 were favourable in many respects. Securities trading was very active and there were increases in both equity and bond prices, all of which has an impact on the company?s performance. The profit of Eignarhaldsfelagid Verdbrefathing hf. is equal to the combined profit of the two subsidiaries less the deduction of goodwill arising from the establishment of the holding company. This has now been fully amortised.
Results Of The Iceland Stock Exchange Ltd.
ICEX's total operating income was ISK 363.0 million and operating expenses were ISK 327.1 million. EBIT was thus ISK 35.9 million, as compared to ISK 21.1 million in 2002. Profit was ISK 36.2 million, as compared to profit of ISK 23.7 million in 2002. ROE was 24.3%, and increased from 16.9% the previous year.
The projected profit according to the operating budget for 2003 was ISK 18.5 million. Operating income was ISK 33 million higher than the budget estimate. This is the result of higher turnover fees than anticipated; these rose by 37% year-on-year, in line with the increase in the turnover of listed securities. Operating expenses exceeded the budget estimates by ISK 14 million, which can in part be attributed to the fact that expenses posted due to the Skagerrak data warehouse and website project exceeded the budgeted costs.
Results Of The Icelandic Securities Depository Ltd.
In 2003, ISD's total operating income was just over ISK 172 million and operating expenses almost ISK 146 million. Profit from operations was thus ISK 26.5 million. After taking financial items and taxes into consideration, profit for the year amounted to just over ISK 20 million, as compared to ISK 10 million in 2002.
The projected profit according to the operating budget for 2003 was ISK 10 million. The increased earnings are due primarily to income which was almost ISK 16 million higher than anticipated in the budget. The increase over the budget is primarily the result of two factors: on the one hand, increased income from issuers (for instance, due to company mergers) and, on the other hand, income due to merging of depositaries. Operating expenses were in line with the 2003 budget, or ISK 146 million.
Outlook
The prospects for 2004 are good. This year?s budget anticipates a slight increase in securities trading. Investments to strengthen company infrastructure will also characterise operations in the coming year. Profit in 2004 is expected to be slightly less than in 2003.
Annual General Meeting of Eignarhaldsfelagid Verdbrefathing hf.
The AGM of Eignarhaldsfelagid Verdbrefathing hf. will be held on Thursday, 18 March 2004. The Board proposes that a dividend of 14% be paid.
