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BM&FBOVESPA S.A. (ticker: BVMF3) today reported its first-quarter earnings for the period ending on March 31, 2016. In the year-over-year comparison, top line growth resulted from better volumes in both derivatives and equities, combined with higher revenues from other business not related to volumes.
BM&FBOVESPA reaffirms its previously announced 2016 budget ranges: (i) adjusted[1] expenses (OPEX) from R$640 million to R$670 million; and (ii) capital expenditures (CAPEX) from R$200 million to R$230 million.
Highlights of the 1Q16 results:
- Revenues from the BM&F Segment grew 10.7% year-over-year. Average daily volume (ADV) increased 13.6% and average revenue per contract (RPC) grew 1.5% in comparison with 1Q15;
- Revenues from the Bovespa Segment were 2.8% higher than in 1Q15, resulting from higher turnover velocity;
- Other revenues not tied to volumes grew 14.1% compared to 1Q15, mainly reflecting adjustments to commercial policies;
- Adjusted expenses in 1Q16 reached R$144.3 million, a 4.1% increase over 1Q15; and
- R$169.7 million in interest on capital, totaling 50% of 1Q16 IFRS net income.
Chief Executive Officer of BM&FBOVESPA, Edemir Pinto, said: “Over the past few months we have moved forward in the execution of our long-term strategic plan of pursuing growth opportunities and creating value for our shareholders. We announced the successful conclusion of negotiations between the Boards of Directors of BM&FBOVESPA and Cetip for the combination of both Companies. This transformational transaction establishes an unparalleled milestone in the development of the Brazilian financial and capital markets, creating a unique and state-of-the-art market infrastructure company that will further enhance the security, efficiency and robustness of the Brazilian capital market. Now, we are focused on obtaining shareholders’ approval on May 20 and then regulatory approvals. We also are moving forward with the second phase of our clearinghouse integration, which will now bring the equities post-trading activities into the integrated clearinghouse, reducing collateral requirements for markets participants, without increasing risk.”
Chief Financial and Investor Relations Officer, Daniel Sonder, commented: “The increase in volumes at the end of the quarter, coupled with higher revenues not tied to volumes resulted in strong operational figures and double-digit operating income growth compared to 1Q15. At the beginning of Apr’16, we announced the sale of the remaining equity stake held in the CME Group, in order to raise proceeds to fund the proposed business combination with Cetip. This sale should not affect our strategic partnership with CME Group and we will continue to seek new business and technological opportunities together. We are confident that the combination with Cetip will further enhance our ability to generate strong cash flows in various businesses and across the economic and market cycles; and pleased that the Company will be able to fund such a significant transaction with a balanced combination of sale of assets (CME), a moderate amount of new debt, and BVMF3 shares issued to CETIP shareholders.”
[1] Expenses adjusted to the Company’s (i) depreciation and amortization; (ii) costs from stock grant plan – principal and payroll taxes – and stock option plan; (iii) combination with Cetip; and (iv) transfer of fines, provisions and incentive programs to market participants.
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