The Board of Directors of Eignarhaldsfelagid Verdbrefathing hf., which owns and operates the Iceland Stock Exchange (ICEX) and the Icelandic Securities Depository (ISD), has approved the company?s interim financial statement for the six months ending 30 June 2006. Earnings for the first half-year amounted to ISK 237.1 million (m) compared to ISK 49.4 m in the year 2005. On 30 June, equity was ISK 592.6 m (ISK 415.6 m at year-end 2005), and the equity ratio 74.8% (78.5% at year-end 2005). Operating income increased by 53% YoY, rising from ISK 308.4 m to ISK 473.2 m. Operating expenses were ISK 296.9 m as compared to ISK 258.8 m in 2005, with the increase thus amounting to almost 15%.
The holding company Eignarhaldsfelagid Verdbrefathing hf. was established in 2002 for the operations of the Iceland Stock Exchange Ltd (ICEX) and the Icelandic Securities Depository (ISD), with a view to increasing the cost-efficiency of the two companies? operations and increasing co-operation between them. The two companies operate as separate units.
ICEX’s total operating income amounted to ISK 313.8 m and operating expenses to ISK 206.8 m. EBIT was thus ISK 107.0 m as compared with ISK 19.6 m in 2005. Net financial income amounted to ISK 101.9 m but was ISK 7.0 m for the same period in 2005. Profit was ISK 172.9 m for the six months as compared to ISK 21.7 m for the first half of 2005. Annualised ROE was 128.7%% as compared with 19.4% for the same period in 2005.
The profit far exceeded expectations, the operating budget having anticipated a profit of just under ISK 20 m in the first half of the year. The main discrepancies primarily concern two factors. Firstly, the trading volume of listed shares was greater than anticipated. It increased by 121% from the same period last year. Income from turnover fees was ISK 186 m or ISK 92 m above budget. Secondly, net financial income was much higher than expected or close to ISK 102 m. Early in the year, Iceland Stock Exchange bought shares in OMX and Oslo Børs for the total amount of ISK 155 m. Until mid-year, recorded revenue from these investments was over ISK 92 m.
OutlookThe trading volume in the first half of the year is unprecedented. There are indications that brisk trading will continue and it is evident that the turnover in 2006 will be much higher than ever before. Some new listings may also be expected in coming months. Moreover, there is increasing interest in remote membership and healthy growth in the sale of information. The outlook is thus good.
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