- Weak performance in the BM&F segment led revenues to decline 6.3% in the quarter compared to 3Q15. Nonetheless, the Bovespa segment and revenues from other business grew in the quarter by 9.0% and 3.5% respectively;
- 3Q16 expenses were negatively impacted by extraordinary provisions for legal contingencies; adjusted expenses1 fell 5.0% year-over-year
BM&FBOVESPA S.A. (ticker: BVMF3) today reported its third-quarter earnings for the period ending on September 30, 2016 (3Q16). In this quarter, lower volumes and revenues per contract (RPC) in BM&F segment drove revenue to a 6.3% decrease compared to the same period of the previous year (3Q15). 3Q16 expenses were impacted by extraordinary items, mainly related to provisions and the proposed business combination with Cetip2.
BM&FBOVESPA reaffirms its previously announced 2016 budget ranges: (i) adjusted expenses (OPEX) from R$640 million to R$670 million; and (ii) capital expenditures (CAPEX) from R$200 million to R$230 million.
Highlights of the 3Q16:
- In the BM&F segment, average daily volume (ADV) and RPC decreased 11.7% and 12.9%, respectively over 3Q15;
- Average daily trading value (ADTV) in the Bovespa segment reached R$6.9 billion in 3Q16, an increase of 5.9% over the same period of the previous year, as a consequence of a higher average market capitalization;
- Other revenues not tied to volumes grew 3.5% compared to 3Q15, mainly driven by an increase of 31.1% in the depository line;
- Adjusted expenses reached R$155.5 million in 3Q16, a decrease of 5.0% over 3Q15;
- Financial result reached R$221.5 million, 157.5% higher over 3Q15, reflecting higher average cash balance to fund the proposed combination with Cetip;
- R$146.7 million in interest on capital, totaling 50% of 3Q16 IFRS net income;
Chief Executive Officer of BM&FBOVESPA, Edemir Pinto, said: “We are moving forward to implement the second phase of the new integrated BM&FBOVESPA Clearinghouse in the first quarter of 2017, which is the last major infrastructure project we are deploying for our clients and market participants and will extend to the equity market the capital efficiency brought by CORE and already available in the financial and commodities derivatives market. By concluding this strategic project, we will be able to shift our focus more heavily towards product and market development initiatives, in order to continue to address the demands received from our clients. While we wait for regulators to approve our business combination with CETIP, we have begun work, within the boundaries set by regulation, in planning some aspects of the integration. Our focus will be to bring together the teams in a way that preserves the cultures of both organizations, maintains the operating and technological excellence in delivering services for the market and regulators, enhances services offered to clients, and captures potential synergies”.
Chief Financial and Investor Relations Officer, Daniel Sonder, commented: “Weak performance in the derivatives market coupled with some non-cash extraordinary expenses hurt our operational performance from an accounting perspective, which did not affect our financial robustness. At this point, we are waiting for the conclusion of the regulatory approval process of the transaction with Cetip and in order to meet the financial needs related to the settlement of the cash portion of this transaction we are retaining a large cash balance, which had a positive impact on our financial result this quarter and structuring a debt issuance. While the transaction with Cetip is not concluded we continue to deliver on key financial metrics, with diligent expense control, executing our projects and developing products and markets”.
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