Oslo Børs VPS Holding 3rd Quarter 2015

A more detailed presentation by business areas is provided in the quarterly report (enclosed).

The third quarter was characterised by a generally somewhat lower level of activity than in preceding quarters. This applies to both the primary and secondary markets. The level of activity was, however, with the exception of the primary market for shares, higher than in the third quarter last year. Oslo Børs VPS is also seeing continued strong interest in the listing and registration of both shares and fixed income issues. Reported revenue for the third quarter of 2015 was NOK 211 million, which is NOK 3 million higher than in the same period in 2014. Revenue related to listing and registration was NOK 5 million lower, while revenue related to trading and settlement was NOK 5 million higher. Revenue from the mutual funds area was NOK 2 million higher. Revenue related to trading and settlement for the third quarter of 2015 includes a non-recurring item of NOK 2 million.

Reported revenue from continuing operations for the first nine months of 2015 was NOK 11 million higher than in the same period in 2014. After adjusting for non-recurring revenue from Burgundy for the first quarter of 2014, reported revenue was NOK 18 million higher. Revenue related to listing and registration was NOK 2 million lower. Revenue related to market data was NOK 6 million higher and revenue from the mutual funds area was NOK 5 million higher. Revenue related to trading and settlement was NOK 9 million higher.

Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 102 million in the third quarter, which represents an increase of NOK 2 million from the same period in 2014. Operating expenses for the first nine months of 2015 were NOK 16 million higher than in the same period in 2014. Reasons for the increase in the third quarter include increases in salaries and prices, higher levels of activity at individual companies and non-recurring items.

Net financial income for the third quarter of 2015 was down NOK 2 million due to lower holdings of cash and cash equivalents and lower interest rates.

One of VPS’s largest customers in the mutual funds area has given notice that its contract with VPS will be brought to an end in 2016. The customer will replace the services provided by VPS with its own newly developed solutions. VPS currently offers solutions that work well in the Nordic market, but the customer’s strategic objectives involve global expansion, which requires solutions and services that VPS neither offers nor sees demand for from other customers. The customer’s decision to terminate its contract with VPS may lead to a reduction in revenue of up to NOK 10 million in 2016 and NOK 18 million in 2017.