Oslo Børs VPS Holding reports a profit of NOK 80 million for the third quarter of 2017 (NOK 66 million) and a profit of NOK 281 million (NOK 196 million) for the first nine months of the year.
A more detailed presentation by business areas is provided in the quarterly report (enclosed).
The third quarter was characterised by the benchmark index reaching new all-time highs and continuing high levels of activity in the primary and secondary equity and fixed income markets.
Reported revenue for the third quarter of 2017 was NOK 233 million, which is NOK 28 million higher than in the third quarter of 2016. Revenue related to listing and registration was in total NOK 18 million higher than in the third quarter of 2016, NOK 2 million of which amount relates to the consolidation of NOTC with effect from the second quarter of 2017. Revenue related to the trading and settlement of equities and fixed income issues was NOK 5 million higher than in the third quarter of 2016, while revenue related to trading in derivatives was in line with the third quarter of 2016. Revenue from the mutual funds area was NOK 4 million higher than in the third quarter of 2016, while revenue related to market data was NOK 1 million higher. Reported revenue for the first nine months of 2017 was NOK 76 million higher than in the first nine months of 2016, with revenue related to listing and registration NOK 66 million higher in the first nine months of 2017 than in the same period last year.
Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 120 million in the third quarter of 2017, an increase of NOK 12 million from the third quarter of 2016. Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value for the first nine months of 2017 were NOK 24 million higher than in the first nine months of 2016. The increase principally relates to the financial sector tax, projects at both Oslo Børs and VPS (including Mifid 2, CSDR, share savings account, modernisation), the appointment of a new CEO of VPS, the fact that some types of costs increase with higher levels of activity, and general increases in salaries and prices.
Net financial income for the third quarter of 2017 totalled NOK 2 million, in line with the same period in 2016. Net financial income for the first nine months of 2017 was NOK 15 million higher than in the first nine months of 2016. The group's acquisition of the remaining 50% of NOTC AS - and its change to a wholly owned subsidiary company from a joint venture - meant that under IFRS the group's previous equity stake in NOTC had to be re-measured. This led to income of NOK 14.6 million being recognised in the second quarter, and to net financial income in the first nine months of this year increasing by NOK 15 million.
Operating expenses for 2017 before capitalisation of internal costs, depreciation and amortisation are expected to be in excess of NOK 500 million (unchanged from last reporting). This includes expenses related to a MiFID II version of Oslo Børs' trading system Millennium Exchange, adapting VPS' systems to the EU's CSD Regulation (CSDR), the financial sector tax that was approved by the Norwegian Parliament in December 2016, and the change of CEO at VPS. The financial sector tax consists of an extra payroll tax of 5% on the salaries and other remuneration received by financial sector employees in addition to the corporation tax rate remaining at 25% for financial sector companies.
Operating expenses for 2018 before capitalisation of internal costs, depreciation and amortisation are also expected to be in excess of NOK 500 million. Included in this figure is an increase in expenses at Centevo in relation to planned development activities at the company.
The group's operating revenue varies in line with the level of activity in the securities market. Oslo Børs VPS is committed to offering a range of products and a pricing structure that are competitive and that encourage active use of the group's services. Oslo Børs VPS anticipates that its marketplace activities will continue to face intense competition, and it also expects increasing competition for the group's post-trade activities.
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Oslo Børs VPS Holding 3rd Quarter 2017
Date 25/10/2017