Highlights of 3Q17:
- Total revenue rises 20% year over year
- Revenue grows in all of B3’s business segments
- BM&F, BOVESPA, CETIP UFIN Segments and Other Revenues enjoy double-digit growth
- Adjusted expenses rise only 2%
- Non-recurring expenses relating to merger fall to R$34m from R$100m in 2Q17
- Recurring EBITDA reaches R$668m, up 10.6% year over year
- Net income affected by fall in financial result; debt reduction will have positive impact in coming quarters
B3 S.A. – Brasil, Bolsa, Balcão ended the third quarter of the year with total revenue of R$1.17 billion, for an increase of 20% compared with 3Q16. Recurring net income was R$445.3 million in 3Q17.
In addition to achieving this revenue growth, B3 completed important projects in the third quarter. “B3 achieved a major milestone with the conclusion of the second phase of our clearinghouses’ integration, migrating the equity and corporate fixed income markets into a new infrastructure integrated with the financial and commodity derivatives markets. We are proud of the work of our teams in delivering a project that significantly strengthens our strategic position. The new clearinghouse is supported by our proprietary CORE risk system, which brings efficiency gains to collateral management, as it considers the entire portfolio of each client. As a result of this deployment, R$21 billion in collaterals were released to our clients, improving the use of capital for the market,” said Gilson Finkelsztain, B3’s Chief Executive Officer.
Revenue increased year over year in all business areas: 19.9% in the BM&F Segment, 18.7% in the BOVESPA Segment, 5.1% in the CETIP UTVM Segment, and 17.3% in the CETIP UFIN Segment. Revenue not linked to trading volume rose 52.4%. “This growth is supported by the platforms we have invested in during the past several years,” said Daniel Sonder, B3’s Chief Financial Officer.
Adjusted expenses grew less than inflation in the period, totaling R$252.1 million. “Expense management remains a top priority and we are on track for capturing synergies from the recent combination with Cetip, which further solidifies the operational leverage of our business,” Sonder noted.
B3 also continued to reduce its debt by redeeming a R$500 million debenture issue. This will have a positive impact on its results in future quarters. “We continue to work towards our goal of reaching a target leverage of 1x gross debt/ EBITDA by the end of 2019. We also intend to continue to return cash to our shareholders, with a payout ratio of 50% of interim results and, potentially, an additional distribution at year-end,” Sonder said.
Integration – The post-merger integration process continues to make progress. “We have completed the redesign of our products and client area, aiming to enhance product development and our customers’ experience,” Finkelsztain said.
B3 ended the period with a market cap of R$49.3 billion.
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