The Tel-Aviv Stock Exchange Reports the Results of the Financial Statements for the First Quarter Of 2023

For the First Time TASE Crosses the NIS 100 million Revenue, With a Substantial 73% Increase in Profit in the First Quarter of the Year to Upwards of NIS 25 Million TASE Expended the Buyback Process with Two Additional Plans for a Total of Up to NIS 124 Million

• TASE’s revenues in the first quarter of 2023 totaled more than NIS 100 million, an increase of 2% compared to the revenues in the corresponding quarter last year; excluding a non-recurring effect included in the corresponding quarter last year, a 7% increase. At the same time, TASE’s operating expenses reduce by 5%, totaling NIS 70 million.
• The profit in the first quarter of 2023 totaled NIS 25.5 million, compared to NIS 14.7 million in the corresponding quarter last year, an increase of 73% between the quarters.
• The adjusted EBITDA in the first quarter of the year totaled NIS 43.5 million, compared to NIS 36.8 million in the corresponding quarter last year, an increase of 18% between the quarters; the EBITDA margin reached a record of 44%, compared to 38% in the corresponding quarter last year.

Ittai Ben Zeev, CEO of TASE, said today: “We are opening the year with strong results in the quarter, including record figures in revenues, profits and EBITDA, and continued organic revenue growth. We moved forward with the implementation of TASE’s strategic plan, among others, by integrating innovative technologies and developing products that strengthen our direct engagement with the public, and by continuing to foster and develop future revenue engines.

Today more than ever, in the face of uncertainty in the markets and an inflationary environment that encumbers both businesses and the public, we call the government to strengthen the Israeli capital market, which is the beating heart of the economy, by developing it, removing barriers and enabling better margins for the public.

We believe that the reduction of the tax rate on capital gains in the local market to 20% is a necessary and important step that will encourage the investors to resume their investments, for the benefit of the Israeli economy and as a means to revitalizing the business activity. We offer our hand to the decision makers in furthering any area that is conducive to advancing the market, enhancing competition and increasing the number of local and global participants, in order to allow the Israeli companies exposure to investors worldwide.”

The Tel-Aviv Stock Exchange Ltd. (TASE: TASE) today announced its financial results for the first quarter ended March 31, 2023.

In the first quarter of the year, trading volumes of bonds and treasury bills increased significantly, alongside a decrease in the trading volumes of equities and a slowdown of IPO’s, this on the backdrop of the uncertainty in the markets as a result of the rise in inflation and interest rates, locally and globally, as well as the judicial reform announced by Israeli government. TASE notes today as one of its strengths the well-balanced trading and clearing environment that it maintains thanks to the wide variety of securities listed on TASE, which places it at an advantage to most international exchanges. 

As TASE continues to display strong reports significant Excess Liquidity and organic growth this quarter, TASE significantly expands the buyback process, with the approval of two additional buyback plans by the Board of Directors: a third plan in an amount of up to NIS 34 million over a period of about six months, as well as another buyback plan, in an amount of up to NIS 90 million, in effect until the end of June 2023, which is not subject to the terms of the “safe harbor” protection. Further to the Board of Directors’ resolution from March 2022 to execute a buyback in an amount of NIS 100 million, to date TASE has purchased under the two plans overall 3.9 million shares for a total consideration close to NIS 66 million, at an average price of NIS 17.1 per share.

Principal activities within the framework of the strategic plan and the development of the market

As part of its strategic plan, TASE is committed to improving the liquidity in the market. Within this framework, a new Equity Indices reform was formulated, based on the insights attainted from an earlier reform launched by TASE that gave the companies an incentive to encourage sales by interested parties in favor of increasing the free float, which currently stands at 63%.

The new reform, which will be launched in November, contains significant incentives for the public companies to increase the liquidity of their shares through a number of actions, such as: structure their IPO to maximize liquidity on the day after the IPO, increasing the free float held by public liquidity providers, such as mutual funds, portfolio managers and retail investors, diversify and expand their base of long-term investors and engage the services of primary dealers, all in alignment with the standard practice in leading global indices. The new reform will also motivate the execution of transactions as part of the trading on TASE in place of OTC transactions. TASE believes that the new reform will increase the volume of assets that track TASE indices and will help to enhance trading liquidity in both the short and the long term, which would translate to greater trading volumes. 

TASE continues to move forward with a dedicated POC in collaboration with the Accountant General in the Ministry of Finance, for the first-ever issuance of digital Israeli government bonds on a blockchain based platform. A significant milestone will take place next week, with the presentation of the system and the running of a live test on the platform, together with the Ministry of Finance and leading local and international banks. This is a first and important step in the development of the local digital assets arena and the exploration of innovative trading technologies, with the ultimate goal of an advanced, cutting-edge, Israeli capital market.  

TASE continues to advance ESG activities and, within this framework, has recently announced the establishment of an impact investment fund for the training and placement of diverse populations in quality employment, in collaboration with SFI (Social Finance Israel). TASE will be donating NIS 300 thousand to this cause.

Highlights of the results for the first quarter of 2023:

Revenue in the first quarter of 2023 totaled NIS 100 million, compared to revenue of NIS 97.7 million in the corresponding quarter last year, an increase of 2%. The increase in revenue is due mainly to the increased volume of activity; eliminating the non-recurring effect of an update to the estimated period of revenue recognition from listing fees (NIS 4.3 million recognized in the corresponding quarter last year), a 7% increase. The revenue from trading and clearing increased by 6%, totaling NIS 42 million, of which 9% is due to the increase in revenue from trading and clearing commissions stemming from the increase in revenue from T-bills, inter alia as a result of the increase in T-bills issuances and the cancellation of the maximum commission on OTC transactions. An increase in revenue from mutual funds and corporate bonds resulted in a 3% increase in revenue. In opposition, a decrease in revenue from equities, due to the reduced trading volumes, resulted in a 6% decrease in revenue compared to the corresponding quarter last year. The revenue from clearing services increased by 10% totaling NIS 19.1 million and the revenue from data distribution and connectivity services increased by 20% totaling NIS 17.1 million  

Costs in the first quarter of 2023 totaled NIS 70.0 million, compared to costs of NIS 73.4 million in the corresponding quarter last year, a 5% decrease. The decrease in the costs is due mainly to a reduction in marketing expenses in the reported period.

Net financing income in the first quarter of 2023 totaled NIS 2.5 million, compared to net financing expenses of NIS 5.2 million in the corresponding quarter last year. The transition to financing income this quarter resulted from a positive return of 0.5% on the Company’s investments in marketable securities’ portfolios comprising Israeli government bonds, compared to a negative return of 2.5% in the corresponding quarter last year. In addition, the increase in the interest rate generated the Company interest income on deposits in an amount of NIS 1.5 million.

The profit in the first quarter of 2023 increased by a substantial 73%, totaling NIS 25.5 million, compared to NIS 14.7 million in the corresponding quarter last year. The increase in profit was due to the increase in revenue from services, the reduction in expenses and the transition to financing income, as described above, net of an increase in the tax expense due to the higher pre-tax profit.

The adjusted EBITDA in the first quarter of 2023 totaled NIS 43.5 million, compared to NIS 36.8 million in the corresponding quarter last year, an increase of 18%. The increase is due to a 2% rise in revenue and a 5% decrease in expenses, primarily marketing costs.

The adjusted profit in the first quarter of 2023 totaled NIS 26.1 million, compared to NIS 14.9 million in the corresponding quarter last year, an increase of 76%. The increase is due to a 2% rise in revenue as a result of the increased volume of activity, a 7% decrease in expenses, primarily marketing costs, and a transition to financing income as a result of the positive return on the Company’s investments in held-for-trade financial assets.

TASE’s equity at the end of the first quarter totaled NIS 692.2 million, a 1% increase compared to the end of 2022. The increase in equity is due mainly to the profit of NIS 25.5 million in the quarter, less a buyback of company shares in an amount of NIS 24.4 million.

Capital and liquidity - The excess capital at the end of the first quarter totaled NIS 615 million, compared to NIS 613 at the end of 2022. The excess liquidity at the end of the first quarter totaled NIS 273 million, compared to NIS 257 million at the end of 2022, a 6% increase.

Click here for the link to the full financial statements for the first quarter of 2023>

Click here for the link to the financial presentation of the first quarter of 2023>

This notification does not supersede the stated in the periodic financial statements of the Company, which contain the full and accurate information.​

The revenue of the Company from trading and clearing is affected, inter alia, by the number of trading and clearing days. In the first quarter of 2023, there were 64 trading days, similarly to the number of days in the corresponding quarter last year. Presented below is information on the quarterly breakdown of trading days: