- BME’s Net Profit Was € 69.2 Million In 2004, 18% Up On 2003
- In 2005 BME Will Pay An Ordinary Dividend Of € 37.8 Million And An Extraordinary Dividend Of € 50 Million
- First Quarter Net Profit Reached € 24.5 Million, Which Equals That Posted By Borsa Italiana For The Whole Year 2004.
- The Company Starts To Work On Its IPO
- BME Subsidiaries Based In Madrid To Be Brought Together In A Single Building
- The Annual Report Includes, For The First Time, An Assessment Of The Work Carried Out By The Board Of Directors As Well As The Board Regulations And The Company’s Internal Code Of Conduct
- Tomás Muniesa Joins The Board
“The year 2004 has been a positive one for BME, whose strength and attractiveness have consolidated notably. The good performance of financial markets as well as the development of new products and services and cost cutting carried out by the Company, has helped it post significant growth in all its markets”, said Antonio Zoido during the General Shareholders Meeting, held today.
“In 2004 Bolsas y Mercados Españoles’ consolidated pre tax profit came in at € 104.9 million and net profit was € 69.2 million, 18% up on 2003”, said Antonio Zoido, Chairman of the Board of Directors.
Net profit in the first quarter 2005 exceeded € 24.5 million, 16% up on the same period last year. The figure equals that posted by Borsa Italiana for the whole year 2004.
With regard to the European securities industry, Zoido said it is being reshaped as a group of competing companies and stressed how favourably BME compares with other stock market operators. BME is among the most profitable markets in the world, ahead of Nasdaq (€ 9.1 million), New York Stock Exchange (€ 21.7 million), Borsa Italiana (€ 25.4 million) and OM (€ 30.2 million) and behind such major stock operators as Deutsche Börse (€ 266,1 million) and Euronext (€149.7 million).
In January BME paid a € 18.9 million dividend charged against income in 2004, that is € 0.226 gross per share. The accounts carried out by the Board in March include a proposal for payment of a complementary dividend payment of the same amount. This leaves total payment per ordinary dividend of € 37.8 million, 16% up on 2003.
The Chairman of BME has proposed to the General Meeting that a payment of a new extraordinary € 50 million dividend be paid and charged against issue premium reserves, that is € 0.5980 per share, which equals the extraordinary dividend payment made in 2004.
In this respect, the Finance Director stated that the total amount of capital distributed since the creation of the Company amounts to almost € 157 million, 34% of the capital plus the issue premium.
According to Zoido, the events that have taken place in the industry stress the complexity of the consolidation process and the need to act with caution. In this regard, BME takes a positive view of any operation in the industry that is in the interests of investors and market participants and is watching closely all initiatives taken in this direction. However, BME has adopted a prudent stand in respect of the latest merger moves in the sector, given the track record of failed attempts to merge market operators.
NEW FACILITIES AND IPO
“BME has continued improving all its business areas in and remodelling its structure. This has led to a significant cost reduction derived mostly from technology synergies”, said the Chairman during the Shareholders’ General Meeting.
The Company is considering bringing together in one single building the subsidiaries in Madrid, which are now located in different areas of the city. This important initiative will boost the integration of the Company’s human resources, cut costs, help develop common services, consolidate the corporate culture and boost the Company’s unity of action.
The Chairman has informed the Meeting that, consistently with the trend followed by other market operators, the Company has started to prepare its IPO, as stated by the Company in its foundational protocol, now two years after its creation, in February 2002.
With its IPO approach, BME follows the trend marked by major stock markets, using an instrument that will permit the Company to achieve its top-level corporate goal and allow shareholders to have an objective valuation of the Company thanks to the quick and efficient liquidity mechanism represented by the IPO.
SPEECH BY THE FINANCE DIRECTOR
During the Shareholding Meeting BME Finance Director, Javier Hernani, stated that the efficiency of the cost model played a key role in translating into profits the growth posted by all market areas. He also highlighted that the 7% reduction in operating costs – with operating income of almost € 200 million, 13% up on 2003- allowed the company to achieve consolidated EBITDA of € 112.9 million, 27% up on the year.
Javier Hernani also stressed the progress made by BME in the optimization of its integrated model, which as far as costs are concerned, allows for a greater cost reduction and increases the scope for synergies. As far as income is concerned, this model permits the Company to rely on a diversified structure thanks to which it can improve the stability of its cash-flow generation.
The earnings per share in 2004 climbed 19% and the net profit gives a ROE ratio of 15.1% against 11.7% last year. The efficiency ratio is 43% thanks to greater revenues achieved through a contained cost-base. The sales margin, as measured in terms of EBITDA / total operating income, is 57%, 6% up on last year’s ratio.
On the occasion of the Shareholders General Meeting, BME presented its 2004 Annual Report, in which the information on Corporate Governance was strengthened. For the first time it includes the Regulations of the Board of Directors and its Internal Code of Conduct. Additionally, BME has carried out a report on the actions adopted by the Board in 2004, in keeping with international Corporate Governance recommendations. A summary of this study can be found in the report.
NEW COMPOSITION OF THE BOARD OF DIRECTORS
The Shareholders’ General Meeting has proceeded with a partial remodelling of its Board of Directors and approved the appointment of Tomás Muniesa as Director, replacing Fernando Ramírez, who resigned from his post.
