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- Record-high sales revenue of PLN 407.6 million
- EBITDA of PLN 215.2 million
- Net profit of PLN 161.3 million
- Increase of operating expenses by 11.3% to PLN 229.4 million
- Cost/income (C/I) ratio at 56.3% in 2021
- Dividend payment of PLN 104.9 million (i.e. PLN 2.50 per share)
- Adoption of the GPW Group ESG Strategy
The GPW Group’s financial performance was successful in 2021. The GPW Group generated record-high sales revenue of PLN 407.6 million, EBITDA of PLN 215.2 million, and net profit of PLN 161.3 million, one of the highest ever. Operating expenses in 2021 stood at PLN 229.4 million while the cost/income (C/I) ratio was 56.3%.
In Q4 2021, the GPW Group generated sales revenue of PLN 107.5 million, EBITDA of PLN 55.2 million, and net profit of PLN 41.4 million. Operating expenses stood at PLN 63.2 million while the C/I ratio was 58.8%.
“For the fourth time, I have the pleasure to present our financial statements, where the net profit of the GPW Group exceeds PLN 150 million. For the second time in a row, we managed to generate more than PLN 400 million in revenues. The year 2021 was more auspicious for the implementation of the #GPW2022 strategy than 2020 when the pandemic slowed us down. With the development of our core business lines, we boast a strong financial position necessary to enter new business areas,” said GPW CEO Marek Dietl.
The impact of the pandemic was still being felt in 2021, stimulating volatility in global financial markets. The equity EOB turnover on GPW increased by 5.5% year on year to a record high PLN 313.5 billion, an increase of 63.7% compared to 2019.
Sixteen companies were newly listed on the Main Market (including four transfers from NewConnect) and 32 companies were newly listed on NewConnect in 2021. Most of the companies newly listed on NewConnect were gamedev and biotechnology stocks. The biggest IPO on GPW was that of Pepco Group worth PLN 3.2 billion (PLN 3.7 billion including the additional allotment option).
New individual investors continued to join the market in 2021. KDPW operated more than 1.374 million investment accounts as at 31 December 2021 vs. 1.329 million as at 31 December 2020, representing an increase of 44.85 thousand accounts or 3.4% year on year.
The volume of spot turnover in electricity was record-high at 36.2 TWh in 2021. The turnover in gas was also at an all-time high and reached 180.8 TWh (spot and forward trade combined). The volume of transactions in the register of guarantees of origin was record-high at 30.3 TWh.
The GPW Group’s potential is corroborated by the dividend paid to the shareholders every year since GPW went public. The company paid PLN 104.9 million in dividend in August 2021, equal to PLN 2.50 per share or 77.3% of the consolidated net profit of 2020 (adjusted for the share of profit of associates). Last year’s dividend yield was 5.23%.
Implementation of the strategy #GPW2022
In 2021, the Group implemented a range of strategic initiatives under the Strategy #GPW2022. Their milestones were consistently met and a review took place monthly at Exchange Management Board meetings and quarterly at Exchange Supervisory Board meetings.
The biggest and most important product under development in the GPW Group is the new trading system: Warsaw Automated Trading System (WATS). The project is progressing according to schedule. At the end of 2021, WATS was at the prototype stage. GPW decided to launch migration from the current trading system UTP to the new WATS system. It is a very complex project involving Exchange Members and data vendors, as well as clearing houses, KDPW, IT solution vendors, and banks. The process of change will be initiated and conducted by GPW, which will coordinate not only the technological change but also the organisational, regulatory, and procedural change.
GPW Tech was responsible for the commercialisation of three technology products and tools. The first one is the TCA Tool, which is used to analyse market macro and micro structure. The product can be sold to other exchanges as well as brokerage houses. Based on the TCA Tool, GPW Tech provided services to the Kuwait Stock Exchange last year. The second product, GPW Stork, is used to detect irregularities in trading on the exchange. It is already used by GPW in market surveillance. Potential users of the tool include brokerage houses and supervisory institutions, also outside Poland. The third product is the new Index Calculator, a tool to calculate stock exchange indices in real time, which replaced the previous tool which was much less efficient and flexible. The new tool has been used by GPW Benchmark since 24 September 2021.
In March 2021, GPW adopted the new corporate governance principles for companies listed on the GPW Main Market: the Best Practice of GPW Listed Companies 2021. It is the next version of a set of corporate governance principles which have been binding on companies listed on the GPW Main Market since 2002. The Best Practice 2021 entered into force on 1 July 2021. With the entry into force of the new set of corporate governance principles, the Exchange made available on its website the Best Practice of Listed Companies Scanner, a tool presenting information published by companies on their compliance with the rules, providing market participants with easy and comprehensive access to such information.
In November 2021, GPW and Artinfo.pl signed a memorandum of understanding to start the development of a business framework enabling the tokenisation of works of art.
In December 2021, GPW, Towarowa Giełda Energii (TGE), the National Bank of Hungary and the Budapest Stock Exchange signed a Term Sheet and declared the establishment of Central Post-trade Solutions (CPS), a commodity market post-trade operator.
The Technology Development Support Programme, whose beneficiaries include brokerage houses, continued in 2021. The Exchange’s Analytical Coverage Support Programme 3.0 for 2021-2023 was launched in July. The Programme has a new framework which aims to increase the number of companies and research providers and make the rules for selecting companies for the Programme more flexible. The Programme covers 65 issuers.
In H2 2021, GPW launched work on two projects: Polish Digital Logistics Operator (PCOL) and Telemetria Operator (TeO). PCOL and TeO contribute to GPW’s diversification.
The objective of the PCOL project is to streamline and facilitate processes in the TSL industry (Transport, Shipping, Logistics) and to ensure security of the Polish transport market. It was launched in response to the needs of the industry of key importance to the Polish economy.
TeO is a new solution to be developed under a grant from the National Centre for Research and Development (NCBiR). It will be designed to profile TV set users and sell and display targeted advertising on linear TV.
The GPW Growth Academy, a unique educational and development programme aimed at small and medium-sized enterprises, continued in 2021. GPW launched the third edition of the GPW Growth Academy in October 2021.
The development activities pursued in 2021 included the adoption of the GPW Group ESG Strategy 2025 in December 2021. The ESG Strategy sets out the ambitions and objectives in the area of sustainable development for 2022-2025. The Strategy defines the main directions of activities in the area of ESG and sustainable development for all companies of the GPW Group.
“ESG is one of the key trends on the capital market. As a public company and the organiser of a trading platform for many listed issuers, GPW wants to set the standard for the best possible incorporation of ESG factors and non-financial reporting in its business. The GPW Group ESG Strategy 2025, adopted and published in December 2021, outlines the ambitions and directions of action in three pillars: environmental, social, and governance. By implementing the ESG Strategy, the GPW Group will make a material contribution to achieving the global 17 Sustainable Development Goals 2030 set by the UN and adopted by all UN Member States. The progress in implementing the ESG Strategy will be presented annually using specific indicators in the GPW Group’s integrated report,” said GPW Management Board Member Izabela Olszewska.
Presentation of the financial results of the GPW Group for Q4 2021 and for 2021
Net profit
The net profit of the GPW Group was PLN 41.4 million in Q4 2021 vs. PLN 47.6 million in Q4 2020 and PLN 36.0 million in Q3 2021. The Group’s annual net profit was PLN 161.3 million in 2021 vs. PLN 152.3 million in 2020. The year-on-year increase of the net profit was due to higher revenue on the commodity market (+3.9% YoY) combined with a decrease of revenue on the financial market (-0.9%) and an increase of operating expenses (+11.3% YoY). The net profit of 2020 included provisions of PLN 11.4 million set up against potential VAT payable of the subsidiary IRGiT (charged to financial expenses). The net profit of 2021 included provisions against IRGiT’s potential payable at PLN 1.9 million. The GPW Group’s consolidated sales revenue was PLN 407.6 million in 2021 vs. PLN 404.0 million in 2020.
FINANCIAL MARKET
Revenue from the financial market
The sales revenue from the financial market stood at PLN 66.3 million in Q4 2021 vs. PLN 78.8 million in Q4 2020 and PLN 54.4 million in Q3 2021. The revenue from the financial market contributed 61.7% of the total sales revenue of the GPW Group vs. 67.7% in Q4 2020 and 60.0% in Q3 2021.
The annual sales revenue from the financial market was PLN 254.7 million in 2021 vs. PLN 256.9 million in 2020. The sales revenue from the financial market contributed 62.5% of the total sales revenue of the GPW Group in 2021 vs. 63.6% in 2020.
The revenue from 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 47.4 million in Q4 2021 vs. PLN 58.8 million in Q4 2020 and PLN 35.5 million in Q3 2021.
The annual trading revenue on the financial market was PLN 177.9 million in 2021 vs. PLN 185.3 million in 2020. The year-on-year decrease in the annual revenue on the financial market was mainly driven by a decrease of turnover in equities and derivatives.
ü Listing revenue
The GPW Group’s listing revenue on the financial market was PLN 4.3 million in Q4 2021 vs. PLN 6.2 million in Q4 2020 and PLN 5.5 million in Q3 2021. The annual listing revenue represented 5.3% of the GPW Group’s total revenue and stood at PLN 21.6 million in 2021 vs. PLN 20.3 million in 2020. Listing revenue includes annual listing fees, fees for introduction, and other fees. As such, the revenue is mainly a function of IPO/SPO activity, the number of issuers, and company capitalisation.
There were 48 new listings on GPW’s markets in 2021 (including four transfers from NewConnect to the Main Market) vs. 21 new listings in 2020. The total IPO value on both equity markets was PLN 9.4 billion in 2021 (vs. PLN 9.6 million in 2020). The value of SPOs was PLN 1.9 billion (vs. PLN 4.7 billion in 2020). The total capitalisation of domestic and foreign companies on GPW’s two equity markets stood at PLN 1,331.5 billion as at 31 December 2021 vs. PLN 1,068.7 billion as at 31 December 2020.
ü Information services
The revenue from information services was record-high at PLN 14.6 million in Q4 2021 vs. PLN 13.8 million in Q4 2020 and PLN 13.4 million in Q3 2021. The annual revenue from information services in 2021 was record-high for another consecutive year and stood at PLN 55.2 million vs. PLN 51.4 million in 2020 (up by 6.9%), accounting for 13.6% of the GPW Group’s total sales revenues.
The GPW Group signed many new agreements for GPW Group data with users in different market segments in 2021. The GPW Group acquired three new processed data clients (including GPW and BondSpot data). The number of subscribers for GPW Group data was record-high in Q4 2021.
COMMODITY MARKET
Revenue from the commodity market
The sales revenue on the commodity market was PLN 40.0 million in Q4 2021, an increase of 9.4% year on year and an increase of 11.6% quarter on quarter. It contributed 37.2% of the Group’s total revenues in Q4 2021. The annual revenue from the commodity market was PLN 150.0 million in 2021, representing an increase of 3.9% year on year and contributing 36.8% of the Group’s total sales revenues. The revenue from 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 stood at PLN 20.2 million in Q4 2021, representing an increase of 11.4% year on year and an increase of 9.7% quarter on quarter. The revenue from trade in electricity was PLN 5.4 million in Q4 2021, an increase of 1.6% year on year and 1.0% quarter on quarter. The annual revenue from trade in electricity was PLN 19.1 million in 2021, an increase of 0.6% year on year.
The revenue from trade in gas increased by 5.0% year on year and decreased by 30.5% quarter on quarter and stood at PLN 3.6 million in Q4 2021. The revenue from trade in gas was PLN 15.0 million in 2021, an increase of 18.3% year on year.
The revenue from trade in property rights stood at PLN 6.8 million in Q4 2021, representing an increase of 11.6% year on year and an increase of 61.3% quarter on quarter. The increase in the revenue from trade in property rights in Q4 2021 was due to a higher volume of trade in RES property rights. The revenue of the segment decreased by 7.8% year on year and stood at PLN 25.1 million in 2021.
The Group’s revenue from trade in food and agricultural products in 2021 stood at PLN 22 thousand. All the revenue was generated in Q1 2021, the first revenue ever earned by the Group in that segment.
The Group’s revenue from other fees paid by commodity market participants stood at PLN 4.4 million in Q4 2021, an increase of 33.2% year on year and an increase of 20.3% quarter on quarter. The Group’s revenue from other fees paid by commodity market participants stood at PLN 15.6 million in 2021 vs. PLN 13.5 million in 2020, an increase of 15.1% year on year. The amount of other fees paid by commodity market participants depends mainly on the activity of IRGiT Members, in particular the number of transactions. There were 78 members of the Commodity Exchange Market (RTG) as at 31 December 2021, 8 Exchange Members on the Financial Instruments Market (RIF), and 50 OTF Members (Organised Trading Facility).
ü Operation of the Register of Certificates of Origin
The revenue from the operation of the Register of Certificates of Origin was PLN 5.6 million in Q4 2021, representing an increase of 1.4% year on year and 14.9% quarter on quarter. The annual revenue from the operation of the Register of Certificates of Origin was PLN 23.8 million in 2021, a decrease of 2.2% year on year.
ü Clearing
The revenue from clearing was PLN 13.9 million in Q4 2021, representing an increase of 9.6% year on year and an increase of 12.7% quarter on quarter. The Group’s annual revenue from clearing was PLN 50.4 million in 2021, an increase of 7.8% year on year. The revenue depends on turnover volumes on the markets operated by TGE.
ü TGE Group information services
Revenue from information services stood at PLN 330 thousand in Q4 2021, an increase of 35.8% year on year and an increase of 34.7% quarter on quarter. Revenue from TGE Group information services stood at PLN 1.1 million in 2021, an increase of 13.7% year on year.
Operating expenses
Operating expenses of the GPW Group stood at PLN 63.2 million in Q4 2021 vs. PLN 55.8 million in Q4 2020, representing an increase of 13.1% year on year and 27.8% quarter on quarter. The annual operating expenses were PLN 229.4 million in 2021 vs. PLN 206.2 million in 2020, an increase of 11.3% year on year. The C/I ratio increased to 56.3% in 2021 vs. 51.0% in 2020.
ü Total employee costs and other personnel costs in Q4 2021 stood at PLN 32.3 million vs. PLN 28.5 million in Q4 2020, an increase of PLN 3.8 million (+13.2%). The annual expenses in 2021 increased by 14.6% year on year, i.e., by PLN 14.0 million to PLN 109.6 million. The increase in employee costs is due to higher headcount in connection with the implementation of strategic initiatives.
ü External service charges stood at PLN 17.6 million in Q4 2021 vs. PLN 15.2 million in Q4 2020, an increase of PLN 2.4 million (+15.7%). Annual charges in 2021 increased by 15.3% year on year i.e. by PLN 7.6 million to PLN 57.3 million.
ü The PFSA fee in 2021 stood at PLN 14.5 million, an increase of PLN 0.6 million or 4.6% year on year.
Share of profit of entities measured by the equity method
The GPW Group’s share of profit of entities measured by the equity method was PLN 5.2 million in Q4 2021 vs. PLN 4.8 million in Q4 2020. The GPW Group’s annual share of profit was PLN 24.4 million in 2021 vs. PLN 15.7 million in 2020, an increase if 54.8% year on year.
The share of profit of entities measured by the equity method was mainly driven by the earnings of the KDPW Group. KDPW’s profit attributable to GPW was PLN 24.1 million in 2021 vs. PLN 15.3 million in 2020.
