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- Best quarterly revenue results in GPW Group’s history at PLN 91 million
- Net profit up by 8.7% year on year; Q1 2017 EBITDA up by 14% year on year despite seasonal effects and one-off events
- Maintained cost regime and year-on-year reduction of the cost/income ratio to 51.1% in Q1 2017
In Q1 2017, GPW Group continued its development initiatives aimed at growing the customer base, increasing liquidity and enhancing the cost regime to bolster efficiency of the Group. As a result, in Q1 2017 the GPW Group generated record-high sales revenues of PLN 91 million and a net profit of PLN 27.7 million; EBITDA stood at PLN 46.8 million. The results were driven mainly by growing turnover on the financial market.
“The GPW Group earned record-high revenues in Q1 2017. This proves the offer of the Group is attractive to market participants. The steadily growing revenue of the GPW Group confirms the solid condition of the Warsaw Stock Exchange. We hope the strong market sentiment will boost further development of GPW and the Polish capital market to the advantage of both issuers and investors,” said Jarosław Grzywiński, acting President of the GPW Management Board.
The Q1 2017 operating expenses stood at PLN 46.5 million and the cost/income ratio was 51.1%. Expenses increased by 0.9% year on year, mainly due to one-off events and seasonal effects. In Q1 2017, provisions were set up for fees due to the PFSA at ca. PLN 11.4 million. Similar to 2016, the full amount was recognised in Q1 and will be adjusted in Q3. In Q1 2017, GPW Group contributed PLN 3 million to the Polish National Foundation. In Qi 2017, the tax office imposed a PLN 3.8 million correction on the interest rate used by POLPX for previous years’ tax liabilities.
The Q1 2017 revenue from the commodity market was stable at PLN 35 million (a decrease of 3% year on year), contributing 38.5% to the total GPW Group revenue. The Q1 2017 revenue from the operation of the Certificates of Origin Register was record-high due to additional activity of register participants including both issuance and cancellations. The revenue was PLN 9.1 million, representing an increase of 14.6% year on year and 148.7% quarter on quarter.
Presentation of the Q1 2017 GPW Group financial results
Net profit
The Q1 2017 GPW Group net profit was PLN 27.7 million in, an increase of 8.7% year on year. The year-on-year increase was mainly driven by higher revenues from the financial market (+25.2%). It was affected by a one-off PLN 3.8 million correction imposed by the Tax Office on the interest rate used by POLPX for previous years’ tax liabilities.
Revenue from the financial market
The Q1 2017 sales revenue from the financial market was record-high at PLN 91 million, an increase of 12.3% year on year and an increase of 11.4% quarter on quarter. Revenue from the financial market contributed 61.2% to the total GPW Group sales revenue, compared to 60.9% in Q4 2016 and 54.9% in Q1 2016. Revenue from the financial market includes trading revenue, listing revenue and revenue from information services.
Trading revenue from the financial market
The Q1 2017 trading revenue from the financial market was PLN 38.8 million, representing an increase of 37.1% year on year and an increase of 16.8% quarter on quarter. The increase of trading revenue from the financial market was mainly driven by an increase of revenue from trade in shares (44.1% year on year and 18.1% quarter on quarter). The Q1 2017 revenue from trade in derivatives increased by 8.9% quarter on quarter and 7.1% year on year. The increase was driven by record-high trade volumes in single-stock and WIG20 futures.
Listing revenue
The Q1 2017 GPW Group listing revenue on the financial market was PLN 6.3 million, an increase of 3.4% quarter on quarter and an increase of 8.1% year on year. The listing revenue represented 7% of the GPW Group’s total revenue in Q1 2017. The Q1 2017 revenue from listing fees increased by 47.8% year on year to PLN 1.2 million. The revenue from listing fees increased by 2% year on year; it should be noted, the fees in 2017 were calculated on the basis of capitalisation of companies as of 2016.
Information services
The Q1 2017 revenue from information services was PLN 10.5 million, representing an increase of 2.2% year on year and an increase of 1% quarter on quarter. The revenue from information services contributed 11.6% to the total GPW Group sales revenue. The increase in the revenue from information services was mainly driven by the development of the GPW Group’s offer of non-display data used in electronic trading, as well as a rising number of subscribers.
Revenue from the commodity market
The Q1 2017 sales revenue from the commodity market was PLN 35 million, compared to PLN 36.1 million i.e., 3% less than in Q1 2016, but 12.1% more than in Q4 2016. It contributed 38.5% to the Group’s total revenues in Q1 2017. The commodity market revenue includes trading revenue, revenue from the certificates of origin register operation and revenue from clearing.
Trading revenue from the commodity market
The Q1 2017 trading revenue on the commodity market decreased by to PLN 15.6 million or 6.4% year on year and 5.5% quarter on quarter. The decrease of revenue from the commodity market was mainly driven by a 31.3% quarter on quarter decrease of revenue from transactions in electricity, in view of high uncertainty on the energy market around the implementation of MiFID II and a reduction of the regulated-market mandatory electricity sales level. The revenue from gas trade was PLN 2.5 million, representing an increase of 1% year on year and a decrease of 17.4% quarter on quarter. The Group’s Q1 2017 revenue from other fees paid by commodity market participants stood at PLN 2.6 million, compared to PLN 2 million in Q1 2016, i.e., it increased by 30.8%. It decreased by 12.1% quarter in quarter in Q1 2017.
Operation of the Certificates of Origin Register
The Q1 2017 revenue from the operation of the Certificates of Origin Register was historically high at PLN 9.1 million, representing an increase of 14.6% year on year and 148.7% quarter on quarter. The increase in the revenue from the operation of the Certificates of Origin Register was mainly driven by high revenue from issuance and cancellation of green certificates of origin.
Clearing
The Q1 2017 revenue from clearing was PLN 10.3 million, representing a decrease of 6.7% quarter on quarter and a decrease of 10.4% year on year. The decrease was driven mainly by falling volumes of forward transactions in electricity.
Operating expenses
The Q1 2017 operating expenses were PLN 46.5 million, an increase of 0.9% year on year and an increase of 23.3% quarter on quarter. The operating expenses were mainly impacted by the one-off recognition of the PLN 11.4 million PFSA fee. The Q1 2017 cost/income ratio was 51.1%, compared to 56.29% in Q1 2016.
Depreciation and amortisation
The Q1 2017 depreciation and amortisation charges stood at PLN 6.4 million, compared to PLN 6.1 million in Q4 2016. The expenses were impacted by an increase of depreciation and amortisation charged quarter on quarter following the initiation of depreciation and amortisation of capital expenditure paid in late 2016 as necessary to align with MiFID II requirements. The Q1 2017 external service charges decreased to PLN 9.0 million, compared to PLN 7.6 million in Q1 2016 and PLN 13.2 million in Q4 2016. Other operating expenses stood at PLN 1.2 million (down by 6.9% quarter on quarter and down by 5.0% year on year).
Profit share of associates
The Q1 2017 GPW Group’s profit share of associates was positive at PLN 1.5 million, compared to a negative PLN 1.4 million in Q1 2016 and a positive PLN 1.2 million in Q4 2016. The profit share of associates was mainly driven by earnings of the KDPW Group and Aquis Exchange. KDPW’s Q1 2017 profit attributable to GPW was PLN 2.0 million, compared to a loss of PLN 0.3 million in Q1 2016 and PLN 2.1 million in Q4 2016. KDPW’s Q1 2017 profit went down quarter on quarter due to the one-off recognition of the annual PFSA fee. The multilateral trading facility Aquis Exchange generated a loss in Q1 2017, including a loss attributable to the GPW Group at PLN 0.8 million (compared to a loss of PLN 0.9 million in Q4 2016 and PLN 1.2 million in Q1 2016).
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Warsaw Stock Exchange (GPW) is the biggest securities exchange in Central and Eastern Europe and organises trade on one of the most dynamically developing capital markets in Europe. GPW operates a regulated market of shares and derivative instruments and the alternative stock market NewConnect for growing companies. GPW is developing Catalyst, a market for issuers of corporate and municipal bonds, as well as commodity markets. Since 9 November 2010, GPW is a public company listed on Warsaw Stock Exchange. For more information, visit http://www.gpw.pl/.
