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- GPW Group’s revenue at PLN 99.1 million in Q2 2022 (+1.2% YoY) and PLN 209.3 million in H1 2022 (-0.1% YoY)
- Operating expenses at PLN 62.5 million (+22.6% YoY) in Q2 2022 and PLN 131.4 million (+12.5% YoY) in H1 2022
- EBITDA at PLN 46.8 million (-18.8% YoY) in Q2 2022 and PLN 97.5 million (-12.5% YoY) in H1 2022
- Operating profit at PLN 37.3 million (-23.7% YoY) in Q2 2022 and PLN 78.3 million (-16.8% YoY) in H1 2022
- Net profit at PLN 38.1 million (-15.5% YoY) in Q2 2022 and PLN 76.1 million (-9.3% YoY) in H1 2022
- Annual General Meeting approved a dividend payment of PLN 115.0 million (PLN 2.74 per share)
The Warsaw Stock Exchange Group (GPW Group) generated PLN 209.3 million of sales revenue in H1 2022, its EBITDA was PLN 97.5 million, operating profit PLN 78.3 million, and net profit PLN 76.1 million. Consolidated revenue decreased by 0.1% year on year in H1 2022 as a result of a modest increase of revenue on the commodity market combined with a modest decrease of revenue on the financial market. The 9.3% YoY decrease of net profit was driven by the stable revenue combined with an increase of operating expenses.
In Q2 2022 alone, the GPW Group generated PLN 99.1 million of sales revenue, EBITDA of PLN 46.8 million, operating profit of PLN 37.3 million, and net profit of PLN 38.1 million. Consolidated revenue increased by 1.2% year on year and decreased by 10.1% quarter on quarter. The year-on-year increase of revenue was driven by an increase of revenue on the commodity market combined with a decrease of revenue on the financial market.
The year-on-year decrease of revenue on the financial market by PLN 2.4 million (-3.9% YoY) was mainly driven by a decrease of revenue from trading in equities and equity-related instruments by PLN 5.9 million (-17.5% YoY). The following revenue streams increased: trading in derivatives by PLN 1.1 million (+32.5% YoY), other fees paid by market participants by PLN 1.0 million (+68.9% YoY), listing by PLN 0.3 million (+6.3% YoY), information services on the financial market by 0.7 million (+4.9% YoY).
The Group’s revenue on the commodity market in Q2 2022 increased by PLN 3.2 million (+8.8% YoY). The following revenue lines reported an increase: trading in property rights by PLN 1.9 million (+26.8% YoY), operation of the register of certificates of origin by PLN 2.0 million (+30.7% YoY), other fees paid by market participants by PLN 1.0 million (+27.4% YoY). On the other hand, revenue from trading in electricity decreased by PLN 1.0 million (-23.3% YoY) and revenue from trading in gas decreased by PLN 0.6 million (-18.6% YoY).
In Q2 2022, the GPW Group continued to implement the current strategy #GPW2022 and commenced the drafting of a new development strategy for 2023-2027.
“The year 2022 marks the end of the time horizon of the strategy #GPW2022 presented in 2018. At that time, we set ourselves very ambitious financial and business goals. Looking at five-year periods, the GPW Group’s financial performance in 2017-2021 was very successful: the average net profit increased by 38 percent compared to the previous five-year period. The key objectives of the Group’s strategy included the establishment of new business lines as well as the diversification of the revenue streams. We have completed some of those initiatives while others are still pending. We have developed many new services and products for market participants,” said Izabela Olszewska, Member of the GPW Management Board.
“Over the last five years, we have put a strong emphasis on seeking opportunities to strengthen the GPW Group’s international position. The milestones of that period include GPW’s promotion to Developed Markets according to FTSE Russell. GPW’s full membership in the World Federation of Exchanges, announced in June 2022, was a crowning of our efforts. As regards M&As, the recent acquisition of the Armenia Securities Exchange makes GPW the majority shareholder in AMX with a stake of 65.03% in the company’s share capital”, said Ms Olszewska.
Operating expenses increased by 22.6% year in year and decreased by 9.2% quarter on quarter and stood at PLN 62.5 million in Q2 2022. The cost/income ratio (C/I) was 63.1% vs. 52.1% in Q2 2021 and 62.4% in Q1 2022. The year-on-year increase of operating expenses was mainly driven by an increase of external service charges and an increase of salaries and other employee costs due to a higher headcount required by the implementation of the development strategy #GPW2022.
In Q2 2022, GPW’s Annual General Meeting approved a PLN 115.0 million dividend payment, equal to PLN 2.74 per share and representing 71.3% of the GPW Group’s consolidated net profit for the financial year 2021 attributable to GPW’s owners and adjusted for the share of profit of associates. The dividend record date was 25 July and the dividend payment date was 5 August 2022. The dividend yield at the closing price on the record date was 7.5%.
Presentation of the financial results of the GPW Group for Q2 2022
Net profit
The net profit of the GPW Group was PLN 38.1 million in Q2 2022, representing a decrease of 15.5% year on year, stable quarter on quarter. The year-on-year decrease of the net profit was driven by a year-on-year increase of revenue by 1.2% combined with an increase of operating expenses by 22.6% YoY. The GPW Group’s net profit was also driven by positive net financial income at +PLN 1.9 million vs. -PLN 2.9 million in Q2 2021. The GPW Group’s net profit was supported by the share of profit of entities measured by the equity method at PLN 7.8 million vs. PLN 7.9 million in Q2 2021.
Revenue from the financial market
The sales revenue from the financial market stood at PLN 58.6 million in Q2 2022, a decrease of 3.9% year on year and a decrease of 20.5% quarter on quarter. The revenue from the financial market contributed 59.2% of the total sales revenue of the GPW Group in Q2 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 38.4 million in Q2 2022 vs. PLN 41.8 million in Q2 2021, representing a decrease of 8.1% year on year and 28.5% quarter on quarter. The year-on-year change in the revenue was mainly driven by a decrease in revenue from trading in equities. The revenue from trading in derivatives, the revenue from trading in debt instruments, and the revenue from trading in other cash market instruments reported an increase. The revenue from fees paid by market participants also increased.
- Listing revenue
The GPW Group’s listing revenue on the financial market was PLN 5.6 million in Q2 2022 vs. PLN 5.3 million in Q2 2021. Revenue from listing fees stood at PLN 4.7 million (+12.6% YoY and -11.5% QoQ). The main drivers of listing revenue are the number of issuers listed on the GPW markets as well as their capitalisation at the end of the previous year. The revenue from listing fees and other fees stood at PLN 0.9 million. The key drivers of revenue in this business line include the number of IPOs on the GPW markets as well as the value of shares and bonds introduced to trading. There were no IPOs on the Main Market and 4 IPOs on NewConnect in Q2 2022 vs. 5 IPOs on the Main Market and 8 IPOs on NewConnect in Q2 2021.
- Information services
The revenue from information services on the financial market stood at PLN 14.6 million in Q2 2022, representing an increase of 4.9% year on year and 6.8% quarter on quarter. The increase of the revenue was driven among others by the acquisition of new clients of GPW Group data (mainly non-display users and data vendors), as well as a high increase in the number of subscribers.
Revenue from the commodity market
The sales revenue on the commodity market was PLN 39.5 million in Q2 2022, an increase of 8.8% year on year and an increase of 10.0% quarter on quarter. It contributed 39.8% of the Group’s total revenues in Q2 2022. The revenue from the commodity market includes trading revenue, revenue from operation of the register of certificates of origin, and revenue from clearing.
- Trading revenue on the commodity market
The trading revenue on the commodity market increased by 7.2% year on year and 16.4% quarter on quarter and stood at PLN 19.6 million in Q2 2022. The revenue from trade in electricity decreased by 23.3% YoY in Q2 2022 due to a decrease of turnover volumes on the spot and forward markets. The revenue from trade in gas decreased by 18.6% YoY in Q2 2022 due to a decrease of turnover volumes on the spot and forward markets.
The revenue from trade in property rights increased by 26.8% YoY due to a higher turnover in certificates of renewable energy sources (“green” certificates”).
The Group’s revenue from other fees paid by commodity market participants increased by 27.4% YoY in Q2 2022. The amount of other fees paid by market participants largely depends on the number and activity of IRGiT Members, in particular the number of their transactions.
- Operation of the Register of Certificates of Origin
The revenue from the operation of the Register of Certificates of Origin was PLN 8.5 million in Q2 2022, representing an increase of 30.7% year on year and 36.1% quarter on quarter. The increase of the revenue from the operation of the Register was driven mainly by high volumes of issued green certificates.
- Clearing
The Group earns revenue from clearing operated by IRGiT, which is TGE’s subsidiary. The revenue from clearing was PLN 11.0 million in Q2 2022, representing a decrease of 2.0% year on year and a decrease of 11.8% quarter on quarter. The change in the revenue is driven by turnover volumes on the markets operated by TGE.
- Information services
Revenue from information services on the commodity market stood at PLN 332 thousand in Q2 2022, an increase of 39.5% year on year and an increase of 9.9% quarter on quarter.
Operating expenses
Operating expenses stood at PLN 62.5 million in Q2 2022, representing an increase of 22.6% year on year and a decrease of 9.2% quarter on quarter. The year-on-year increase in operating expenses was driven by an increase of salaries and other employee costs, as well as an increase of external service charges. Salaries and other employee costs stood at PLN 27.7 million, an increase of 4.6% YoY. The increase of salaries and other employee costs was mainly driven by a higher headcount necessary to implement the development strategy #GPW2022. External service charges stood at PLN 20.2 million, an increase of 55.7% YoY, mainly due to higher IT costs and advisory costs. Depreciation and amortisation charges increased by 9.4% YoY to PLN 9.5 million while maintenance fees increased by 7.4% YoY to PLN 1.3 million in Q2 2022.
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 7.8 million in Q1 2022, representing a decrease of 0.7% YoY and an increase of 71.4% QoQ. The year-on-year decrease was driven by lower profits of the KDPW Group. The KDPW Group’s results in Q2 2022 were driven by an increase of revenue from KDPW_CCP’s clearing services, an increase of revenue from services for issuers (higher revenue from the payment of benefits and the redemption of securities), a decrease of revenue from the operation of the securities depository (due to a lower capitalisation of securities) and a decrease of revenue from settlement fees on the cash market (due to the regulatory requirement imposing a new method of calculating settlement discipline fees).
