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- GPW Group’s revenue at PLN 112.3 million, second best ever
- Revenue of new business lines (GPW Logistics, GPW Tech, and AMX) at PLN 9.5 million
- Net profit at PLN 27.0 million under pressure of higher operating expenses related to strategic initiatives and inflationary pressures
- GPW Management Board’s motion for dividend payment at 113.3 million (PLN 2.70 per share) – dividend yield of 7.35%
- Finalisation of work on the GPW Group’s new strategy for 2023-2027
The Warsaw Stock Exchange Group (GPW Group) generated revenues of PLN 112.3 million in Q1 2023 (an increase of 1.8% year on year).
“The year 2023 started well for our Group: in terms of revenue, Q1 was the second best ever in the GPW Group’s history. This was due in part to revenues from new business lines, including GPW Logistics, GPW Tech and the Armenia Securities Exchange, which accounted for around 10 percent of our sales. We can only regret that the pandemic delayed the commercialisation of our strategic initiatives by several months,” said Marek Dietl, President of the GPW Management Board.
“The results of Q1 2023 clearly show that it was the right move to deploy our core competences in new business areas. As a result, we are steadily curbing our dependence on the conditions prevailing in the global financial markets. Growing sales and the increasing share of recurring revenues are among the priorities of the new strategy, as well, even if this may temporarily lead to a decline in profitability,” stressed Mr Dietl.
Revenue from the financial market amounted to PLN 66.5 million, the highest since Q1 2022 when stock market volatility was elevated by the Russian military invasion of Ukraine. Revenue from the commodity market increased by 15.3% year on year to PLN 41.4 million in Q1 2023, the highest quarterly figure since Q2 2019. Combined revenues from information sales on the financial and commodity market in Q1 2023 were the highest in the history of the GPW Group and for the first time exceeded PLN 15 million.
The net profit of the GPW Group was PLN 27.0 million in Q1 2023, representing a decrease of 29.0% year on year, mainly due to higher operating expenses. The increase in expenses was driven by additional FTEs (especially in GPW), higher salaries among others due to higher inflation, as well as higher external service charges, including mainly IT and consulting costs. As in previous years, in Q1 2023 the Group recognised a provision for annual capital market supervision fees, which amounted to PLN 15.5 million, an increase of PLN 0.8 million year on year.
The GPW Management Board recommended the payment of a dividend for 2022 in the amount of PLN 113.3 million, equal to PLN 2.70 per share and representing 78.17% of the consolidated net profit (97.09% of the net profit attributable to the shareholders of the parent company adjusted for the share of profits of associates).
The companies of the GPW Group continue to implement development initiatives under the Strategy #GPW2022. Work on the adoption of a new multi-year plan for the development and operation of the GPW Group is nearing completion.
Presentation of the financial results of the GPW Group for Q1 2023
FINANCIAL MARKET
Revenue from the financial market
The sales revenue from the financial market stood at PLN 66.5 million in Q1 2023 vs. PLN 73.7 million in Q1 2022 and PLN 57.4 million in Q4 2022. The revenue from the financial market contributed 59.2% of the total sales revenue of the GPW Group in Q1 2023 vs. 66.9% in Q1 2022 and 62.7% in Q4 2022.
The revenue from the financial market includes trading revenue, listing revenue, and revenue from information services.
- Trading revenue on the financial market
The trading revenue on the financial market stood at PLN 44.4 million in Q1 2023 vs. PLN 53.7 million in Q1 2022 and PLN 37.2 million in Q4 2022.
The year-on-year decrease in the trading revenue on the financial market was driven by lower revenue from trading in equities (PLN 30.2 million, -28.6% YoY) combined with an increase in other fees paid by market participants (PLN 5.8 million, +148.3% YoY. The Electronic Order Book turnover on the Main Market in Q1 2023 stood at PLN 69.8 billion, a decrease of 29.1% year on year: last year’s high base was due to increased volatility in financial markets following the Russian military invasion of Ukraine. However, investor activity in the stock market in Q1 2023 was significantly higher than the in comparable quarters in the years preceding the pandemic.
- Listing revenue
The GPW Group’s listing revenue on the financial market was PLN 6.3 million in Q1 2023, the same as in Q1 2022 vs. PLN 5.6 million in Q4 2022. Listing revenue includes annual listing fees, introduction fees and other charges. Revenues therefore mainly depend on IPO/SPO activity, the number of issuers and the capitalisation of companies. Four companies were newly listed on the GPW Main Market in Q1 2023 (transfers from NewConnect) and two companies were newly listed on NewConnect. The total value of IPOs and SPOs on both markets amounted to PLN 545 million vs. PLN 231 million in Q1 2022. The combined capitalisation of domestic and foreign companies listed on both GPW stock markets amounted to PLN 1,258.7 billion as at 31 March 2023 vs. PLN 1,258.7 billion vs. PLN 1,267.3 billion as at 31 March 2022.
- Information services
The revenue from information services on the financial market was record-high at PLN 14.8 million in Q1 2023 vs. PLN 13.7 million in Q1 2022 and PLN 14.6 million in Q4 2022. GPW had 55,600 data subscribers as at 31 March 2023 vs. 503,500 as at 31 March 2022.
COMMODITY MARKET
Revenue from the commodity market
The sales revenue on the commodity market was PLN 41.4 million in Q1 2023, an increase of 15.3% year on year and an increase of 25.7% quarter on quarter. It contributed 36.8% of the Group’s total revenues in Q1 2023. The revenue from the commodity market includes trading revenue, revenue from operation of the register of certificates of origin, revenue from clearing, and revenue from information services.
- Trading revenue on the commodity market
The trading revenue on the commodity market stood at PLN 20.3 million in Q1 2023, an increase of 20.6% year on year and 20.8% quarter on quarter.
The revenue from trade in electricity was PLN 5.7 million in Q1 2023 vs. PLN 3.8 million in Q1 2022 and PLN 2.8 million in Q4 2022.
The revenue from trade in gas increased by 22.6% year on year and 15.9% quarter on quarter and stood at PLN 4.2 million.
The revenue from trade in property rights stood at PLN 5.2 million in Q1 2023, representing a decrease of 3.1% year on year and an increase of 4.7% quarter on quarter.
The Group’s revenue from other fees paid by commodity market participants stood at PLN 5.3 million in Q1 2023, an increase of 22.3% year on year and a decrease of 4.7% quarter on quarter.
- Operation of the Register of Certificates of Origin
The revenue from the operation of the Register of Certificates of Origin was PLN 6.9 million in Q1 2023, representing an increase of 10.5% year on year and an increase of 44.3% quarter on quarter.
- Clearing
The revenue from clearing was PLN 13.7 million in Q1 2023, an increase of 10.6% year on year and an increase of 25.9% quarter on quarter. The revenue from clearing depends on the volume of trading on the markets operated by TGE.
- TGE Group information services
The revenue from information services stood at PLN 356,000 in Q1 2023, an increase of 17.9% year on year and an increase of 5.6% quarter on quarter.
Operating expenses
Operating expenses stood at PLN 86.2 million in Q1 2023 vs. PLN 68.8 million in Q1 2022, representing an increase of 25.2% year on year and an increase of 34.2% quarter on quarter.
- Salaries and other employee costs stood at PLN 34.3 million in Q1 2023 vs. PLN 27.6 million in Q1 2022, an increase of PLN 6.6 million year on year (+24.1 % YoY) and PLN 6.6 million quarter on quarter (+23.7%). The increase was driven by an increase of salaries in H2 2022 and an increase in FTEs, in particular in GPW, necessary to implement strategic initiatives.
- External service charges in Q1 2023 stood at PLN 23.1 million vs. PLN 13.9 million in Q1 2022, an increase of PLN 9.2 million year on year (+66.3%). The increase was driven by an increase of total IT expenses (PLN 10.5 million vs. PLN 6.8 million), an increase in advisory costs (PLN 3.9 million vs. PLN 2.0 million) and a significant increase in the costs of growth of GPW Logistics (PLN 3.3 million). External service charges in Q1 2023 decreased by 1.3% quarter on quarter.
- The GPW Group recognised provisions against capital market supervision fees at PLN 15.5 million in Q1 2023, an increase of 5.7% year on year. The amount recognised in the first quarter of each financial year represents an annual fee, which is not distributed evenly over time. The Group cannot control the amount of PFSA fees. The actual amount of the supervision fee for 2023 will be published by PFSA in Q3 2023.
Share of profit of entities measured by the equity method
The GPW Group’s share of profit of entities measured by the equity method stood at PLN 4.3 million in Q1 2023 vs. PLN 4.6 million in Q1 2022. The share of profit of entities measured by equity method is mainly driven by profits of the KDPW Group. The profit of the KDPW Group attributable to GPW was PLN 4.5 million vs. PLN 4.3 million in Q1 2022. The share of loss of Centrum Giełdowe was PLN 147,000 vs. a share of profit at PLN 302,000 in Q1 2022.
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The Warsaw Stock Exchange Group (GPW Group) operates trading platforms for shares, Treasury and corporate bonds, derivatives, electricity and gas, and provides indices and benchmarks including WIBOR and WIBID. The index agent FTSE Russell classifies the Polish capital market as a Developed Market since 2018. The markets operated by the GPW Group are the biggest in Central and Eastern Europe. For more information, visit www.gpw.pl.
