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- Record-high net profit of GPW Group at PLN 79.1 million in Q2 2018
- Consolidated sales revenue at PLN 86.6 million in Q2 2018
- C/I at 46.2% in line with GPW Group’s strategic objectives
- GPW Group published a strategy update #GPW2022 and launched 14 initiatives geared to business growth
- General Meeting decided to pay dividend of PLN 92.3 million (PLN 2.20 per share)
The GPW Group generated revenues at PLN 86.6 million in Q2 2018 (-1.1% YoY and +0.8% QoQ) The decrease of the Group’s revenue year on year was mainly driven by less active trading on the financial market. Revenue from the commodity market (TGE) increased both year on year and quarter on quarter. The Group’s EBITDA was PLN 54.4 million in Q2 2018 (-3.0% YoY and +27.7% QoQ). The Group generated a record-high net profit of PLN 79.1 million in Q2 2018 (+88.6% YoY and +177.7% QoQ). The net profit of the period was largely driven by financial income earned mainly on the sale of the associate Aquis Exchange. At the end of June, the Group published its updated growth strategy #GPW2022 and presented 14 initiatives geared to business growth. The Group will focus on technological development and diversification of revenue in the coming years.
“GPW has recently announced 14 strategic initiatives of the GPW Group which are already under implementation. We have raised funding for one of the initiatives from the DIALOG programme of the Ministry of Science and Higher Education. We will be adding another ten projects contributing to the development of the Polish exchange and the Polish economy,” said Marek Dietl, President of the GPW Management Board. “Global exchanges have diversified their revenue mix and expanded into new business areas. Being aware of changes in the market, GPW will deliver superior products and focus on new sources of revenue. The GPW Management Board reinforced by two very competent new members, Izabela Olszewska and Piotr Borowski, is ready to face new challenges and to work for the benefit of the Polish capital market,” said Ms Dietl.
Operating expenses increased by 5.9% year on year and decreased by 17.3% quarter on quarter to PLN 40.0 million. The cost/income ratio (C/I) was 46.2% compared to 43.1% in Q2 2017 and 56.3% in Q1 2018.
In Q2 2018, the Ordinary General Meeting of GPW decided to pay PLN 92.3 million of dividend (PLN 2.20 per share) representing 63.3% of the consolidated net profit of GPW for the financial year 2017 attributable to the shareholders of GPW adjusted for share of profit of associates. The dividend is in line with GPW’s dividend policy. The Ordinary General Meeting of GPW set the dividend record date at 19 July 2018 and the dividend payment date at 2 August 2018.
Presentation of the GPW Group’s financial results for Q2 2018
Net profit
The net profit of the GPW Group was PLN 79.1 million in Q2 2018 (+88.6% YoY and +177.7% QoQ). The increase of the net profit was driven mainly by an increase of net financial income, which was largely due to the gains on the sale of the associate Aquis Exchange in June 2018.
Revenue from the financial market
The sales revenue from the financial market was PLN 47.1 million in Q2 2018 (-10.4% YoY and -5.1% QoQ). The revenue from the financial market contributed 54.3% of the total sales revenue of
the GPW Group. The revenue from the financial market includes trading revenue, revenue from issuers, and revenue from information services.
Trading revenue on the financial market
The trading revenue on the financial market was PLN 30.1 million in Q2 2018 compared to PLN 36.0 million in Q2 2017 and PLN 32.9 million in Q1 2018. The decrease in the revenue was mainly driven by a decrease of the revenue from trade in equities and equity-related instruments (-17.6% YoY and -8.0% QoQ) to PLN 22.9 million due to less active trading on the Main Market.
Revenue from issuers
The GPW Group’s revenue from services for issuers on the financial market was PLN 5.8 million in Q2 2018 compared to PLN 6.1 million in Q2 2017 and PLN 5.9 million in Q1 2018. The revenue from listing fees stood at PLN 5.0 million in Q2 2018 (+2.2% YoY and -1.4% QoQ). The main driver of the revenue from listing fees is the number of issuers on the GPW markets and their capitalisation as at the end of the previous year. Due to less IPO and SPO activity in Q2 2018, the revenue from introduction fees decreased to PLN 0.8 million compared to PLN 1.2 million in Q2 2017. The revenue from introduction fees was stable quarter on quarter compared to PLN 0.8 million in Q1 2018.
Information services
The revenue from information services stood at PLN 11.1 million in Q2 2018 (+6.3% YoY and +3.5 % QoQ). The increase of the revenue from information services was driven by an increase in the number of data vendors and subscribers. The revenue from information services contributed 12.8% of the GPW Group’s total sales revenues.
Revenue from the commodity market
The sales revenue on the commodity market was PLN 39.2 million in Q2 2018 (+12.8% YoY and +8.3% QoQ). It contributed 45.3% to the GPW Group’s total revenues in Q2 2018. 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 stood at PLN 19.6 million in Q2 2018 (+11.4% YoY and +10.8% QoQ). The revenue from trade in energy increased in Q2 2018 and stood at PLN 4.3 million (+115.9% YoY and +38.4% QoQ). The revenue from trade in gas stood at PLN 1.9 million in Q2 2018 (+4.3% YoY and -13.6% QoQ). The revenue from trade in property rights of certificates of origin stood at PLN 10.6 million (-4.6% YoY and +11.5% QoQ). The Group’s revenue from other fees paid by commodity market participants stood at PLN 2.8 million in Q2 2018 (+4.2% YoY and –2.7% QoQ). 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.
Operation of the Register of Certificates of Origin
The revenue from the operation of the Register of Certificates of Origin was PLN 8.9 million in Q2 2018 (+14.6% YoY and +25.2 QoQ). The increase in the revenue from the operation of the Register of Certificates of Origin was due to an increase in the volume of cancelled certificates of origin.
Clearing
The revenue from clearing was PLN 10.5 million in Q2 2018 (+13.8% YoY and -6.4% QoQ). The change of the revenue was driven by volumes of trade on all markets operated by TGE.
Information services
The revenue from information services on the commodity market stood at PLN 132 thousand in Q2 2018 compared to PLN 86 thousand in Q2 2017 and PLN 98 thousand in Q1 2018.
Operating expenses
Operating expenses were PLN 40.0 million in Q2 2018 (+5.9% YoY and -17.3% QoQ). The cost/income ratio (C/I) was 46.2% in Q2 2018 compared to 43.1% in Q2 2017 and 56.3% in Q1 2018.
Depreciation and amortisation charges increased year on year and quarter on quarter in Q2 2018 and stood at PLN 8.1 million (+15.2% YoY and 3.4% QoQ). The increase of the depreciation and amortisation charges was driven by the implementation of two new systems in TGE in 2017: X-Stream (May) and Sapri (November).
Total salaries stood at PLN 16.6 million in Q2 2018 (+11.6% YoY and -4.5% QoQ). The year-on-year increase was driven by a higher headcount and an increase of salaries.
The GPW Group’s rent decreased to PLN 1.9 million in Q2 2018 (-25.6% YoY and -22.4% QoQ). The decrease of rent was due to the completion of the relocation of all GPW Group companies to a shared head office, optimising the cost of rent of leased office space.
External service charges stood at PLN 11.5 million, representing a decrease of 1.2% YoY and an increase of 16.0% QoQ. The charges included mainly the cost of advisory in the sale of Aquis Exchange and in the strategy update in Q2 2018.
Financial income and expenses
The high financial income in Q2 2018 was due to the sale of a stake in the associate Aquis Exchange. The net financial income on the sale was shown at PLN 45.4 million in the consolidated accounts. In addition, financial income mainly includes interest on bank deposits and positive FX differences.
Share of profit of associates
The GPW Group’s share of profit of associates was PLN 4.5 million in Q2 2018 compared to PLN 3.0 million in Q2 2017 and PLN 0.7 million in Q1 2018. The share of profit of associates was mainly driven by the earnings of the KDPW Group and Aquis Exchange.
