- GPW Group’s revenue at PLN 89.1 million in Q2 2019
- EBITDA at PLN 57.6 million in Q2 2019
- Operating profit at PLN 48.2 million in Q2 2019
- Net profit at PLN 42.6 million in Q2 2019
- Operating expenses at PLN 43.3 million in Q2 2019
- General Meeting decided to pay a dividend of PLN 133.5 million (PLN 3.18 per share)
The Warsaw Stock Exchange (GPW) Group generated revenues of PLN 89.1 million and a net profit of PLN 42.6 million in Q2 2019. Its EBITDA was 57.6 million in Q2 2019. The consolidated revenues increased by 5.9% quarter on quarter and by 2.9% year on year in Q2 2019. The year-on-year increase of the revenues was mainly driven by an increase of the revenue from the commodity market by PLN 4.2 million (10.7%).
The year-on-year increase of the revenue from the commodity market was due mainly to an increase of revenues from trading. It was driven by an increase of the revenue from trading in gas by PLN 1.1 million and an increase of the revenue from trading in property rights by PLN 1.9 million. The revenue from clearing also increased (by PLN 1.7 million).
The Group’s revenue from the financial market decreased quarter on quarter and year on year in Q2 2019. The revenue from listing decreased by PLN 0.8 million quarter on quarter to PLN 5.1 million in Q2 2019. The revenue from information services continued to increase: it grew by 7.5% or PLN 0.8 million year on year in Q2 2019.
The companies of the GPW Group continued to implement the growth strategy #GPW2022 in Q2 2019.
“We have been implementing our strategic initiatives with determination for a year. The decision to start the development of a proprietary trading system is a milestone on the road to diversification of the Group’s revenue, mitigating the dependence of financial results on conditions prevailing on our exchanges. The GPW Growth Programme is very important for the mid-term prospects of our current business. Steady support for the development of competences of potential issuers will improve the number and quality of IPOs within several years. We are focusing on the development of those business lines of the Exchange which match the #GPW2022 strategic goals,” said Marek Dietl, President of the GPW Management Board.
Operating expenses increased by 8.4% year on year and decreased by 20.2% quarter on quarter to PLN 43.3 million Q2 2019. The cost/income ratio (C/I) was 48.6% vs. 64.5% in Q1 2019 and 46.2% in Q2 2018.
The year-on-year increase of operating expenses was driven by an increase of depreciation and amortisation by PLN 1.3 million and an increase of total employee costs by PLN 2.7 million due to a higher headcount as a result of the implementation of the growth strategy #GPW2022. The cost of rent and other charges dropped by PLN 0.9 million year on year.
The GPW General Meeting in Q2 2019 decided to pay a dividend of PLN 133.5 million, i.e., PLN 3.18 per share, equal to 77.1% of the consolidated net profit of GPW for the financial year 2018 attributable to the shareholders of GPW adjusted for the share of profit of associates. The dividend record date was 19 July and the payment date is 2 August 2019.
Presentation of the GPW Group’s financial results for Q2 2019
Net profit
The net profit of the GPW Group was PLN 42.6 million in Q2 2019, down by 46.2% year on year and up by 74.0% quarter on quarter. The year-on-year decrease of the net profit was driven largely by a higher reference base due to the sale of interest in Aquis Exchange in Q2 2018 (+PLN 36.8 million in the Group’s net profit in Q2 2018). Net of the one-off, the net profit was stable year on year in Q2 2019.
Revenue from the financial market
The sales revenue on the financial market was PLN 45.4 million in Q2 2019, representing a decrease of 3.4% year on year and 8.2% quarter on quarter. The revenue on the financial market contributed 51.0% of the total sales revenue of the GPW Group. The revenue on the financial market includes trading revenue, listing revenue, and revenue from information services.
ü Trading revenue on the financial market
The trading revenue on the financial market was PLN 28.4 million in Q2 2019 compared to PLN 30.1 million in Q2 2018, representing a decrease of 5.6% year on year and 11.2% quarter on quarter. The revenue was mainly driven by a decrease of revenue from trading in shares and a decrease of revenue from trading in derivatives, down by 8.8% year on year and 13.4% quarter on quarter and by 18.3.3% year on year and 8.6% quarter on quarter, respectively.
ü Listing revenue
The GPW Group’s listing revenue on the financial market was PLN 5.1 million in Q2 2019 compared to PLN 5.8 million in Q2 2018 and PLN 5.3 million in Q1 2019. The revenue from listing fees was PLN 4.3 million (-13.7% year on year and -5.9% quarter on quarter). The main drivers of listing revenue include the number of issuers listed on GPW markets and their capitalisation at the end of the previous year. Revenues from fees for introduction and other fees stood at PLN 0.7 million (-10.1% year on year and +9.6% quarter on quarter). The revenues in this business line are mainly driven by the number of IPOs on the GPW markets and the value of shares and bonds introduced to trading.
ü Information services
The revenue from information services stood at PLN 12.0 million in Q2 2019, representing an increase of 7.5% year on year and a decrease of 2.0% quarter on quarter. The revenue from information services contributed 13.4% of the GPW Group’s total sales revenues.
Revenue from the commodity market
The sales revenue on the commodity market was PLN 43.4 million in Q2 2019, an increase of 10.7% year on year and an increase of 25.7% quarter on quarter. It contributed 48.7% to the GPW Group’s total revenues in Q2 2019. The revenue on the commodity market includes trading revenue, revenue from operation of the register of certificates of origin, and revenue from clearing.
ü Trading revenue on the commodity market
The trading revenue on the commodity market increased by 12.5% year on year and by 38.9% quarter on quarter to PLN 22.1 million in Q2 2019. The revenue from trading in electricity was PLN 3.5 million, a decrease of 19.4% year on year and an increase of 7.9% quarter on quarter. The revenue from trading in gas increased by 58.5% year on year and by 30.2% quarter on quarter to PLN 3.1 million. The revenue from trading in property rights of certificates of origin increased by 17.8% year on year and by 70.7% quarter on quarter to PLN 12.5 million in Q2 2019. The Group’s revenue from other fees paid by commodity market participants stood at PLN 3.0 million in Q2 2019, representing an increase of 9.6% year on year and 1.4% quarter on quarter. The amount of other fees paid by commodity market participants depends largely on the number and the activity of IRGiT Members, in particular the number of transactions.
ü Operation of the Register of Certificates of Origin
The revenue from the operation of the Register of Certificates of Origin was PLN 9.0 million in Q2 2019, representing an increase of 0.4% year on year and 17.8% quarter on quarter.
ü Clearing
The Group earns revenue from clearing activities of IRGiT, which is a subsidiary of TGE. The revenue from clearing was PLN 12.2 million in Q2 2019, representing an increase of 15.9% year on year and 12.3% quarter on quarter. The change of the revenue was driven by volumes of trade on all markets operated by TGE.
ü Information services
The revenue from information services on the commodity market stood at PLN 171 thousand in Q2 2019 compared to PLN 132 thousand in Q2 2018 and PLN 169 thousand in Q1 2019.
Operating expenses
Operating expenses were PLN 43.3 million in Q2 2019, an increase of 8.4% year on year and a decrease of 20.2% quarter on quarter. The year-on-year increase in operating expenses was driven by an increase of depreciation and amortisation and an increase of salaries and other employee costs.
Depreciation and amortisation charges increased by 16.3% year on year and 2.5% quarter on quarter to PLN 9.4 million. The year-on-year increase of depreciation and amortisation charges was due mainly to the implementation of the new standard IFRS 16 Leases in all Group companies. The implementation of the Standard eliminated the differentiation between operating leases and finance leases. Consequently, lessees recognise nearly all leases in the statement of financial position, including leases of office space, car parks, colocation, perpetual usufruct, and cars.
Total employee costs stood at PLN 19.3 million, an increase of 16.0% year on year and a decrease of 0.6% quarter on quarter. The increase in total employee costs was driven by a gradual increase of the Group’s headcount in view of a bigger workload in the implementation of the growth initiatives under the strategy #GPW2022.
The GPW Group’s cost of rent was PLN 1.1 million in Q2 2019, a decrease of 44.4% year on year and an increase of 4.6% quarter on quarter. The year-on-year decrease was mainly driven by the implementation of IFRS 16.
Share of profit of entities measured by the equity method
The GPW Group’s share of profit of entities measured by the entity method was PLN 3.6 million in Q2 2019 compared to PLN 4.5 million in Q2 2018 and PLN 1.0 million in Q1 2019. The year-on-year decrease was driven by a lower profit of the KDPW Group and a loss of Polska Agencja Ratingowa.
GPW Group’s Financial Results Q2 2019
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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 calculates the benchmarks 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
