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- Record-high net profit of PLN 47 million in Q3 2017
- Historically high EBITDA at PLN 57.4 million and EBITDA margin at 70.7% in Q3 2017
- Cost/income ratio at 45% in 9M 2017 vs. 49.1% in 9M 2016
The GPW Group generated a record-high net profit of PLN 47 million in Q3 2017. EBITDA was historically high at PLN 57.4 million while the sales revenue stood at PLN 81.1 million, representing an increase of 10.1% year on year. The GPW Group’s financial results were driven by one-off events including the release of PLN 5.8 million of provisions due to a lower annual fee paid by the GPW Group to cover the cost of capital market supervision; the refund of PLN 3.8 million of interest on overdue taxes charged by the tax authorities following the correction of POLPX’s VAT; as well as the release of PLN 1.6 million of provisions against uncollectible receivables from the VAT correction due from POLPX’s counterparties. The year-on-year increase of the sales revenue was driven by higher volumes both on the financial market and the commodity market. GPW paid PLN 90.2 million of dividends to the shareholders in Q3, which implies a payment of PLN 2.15 per share.
“Q3 2017 is when the GPW Group’s EBITDA was historically the highest. The Group also generated a record-high net profit of PLN 47 million, which was nearly 19 percent more than a year earlier. All of this demonstrates our high efficiency. We will work just as hard next quarter in preparation for regulatory changes, including the implementation of MiFID II. We will continue to grow all of our business lines, expand the customer base, build up liquidity, and rationalise costs. FTSE Russells’ reclassification of Poland to developed markets makes us very optimistic and gives us an incentive for development in order to compete with the world’s leaders,” said Marek Dietl, President of GPW’s Management Board.
Operating expenses stood at PLN 32.5 million in Q3 2017 and the cost/income ratio was 40.1%, representing an increase of 1.7 percentage points year on year. Ca. PLN 5.8 million of provisions against supervision fees due to PFSA were released in Q3 2017. Similar to last year, the full amount of the fee was charged in Q1 and later adjusted in Q3.
The revenue from the commodity market was PLN 32 million in Q3 2017, stable quarter on quarter and an increase of 19.7% year on year, contributing 39.4% of the total revenue of the GPW Group. The increase of the segment’s revenue in Q3 2017 was mainly driven by growing volumes on the gas market, as well as an increase in the revenue from clearing (+25.1% YoY).
Presentation of the GPW Group’s financial results for Q3 2017
Net profit
The net profit of the GPW Group was PLN 47 million in Q3 2017, an increase of 18.9% year on year. The year-on-year increase in Q3 2017 was driven by a rising revenue from the financial market (+4.7% YoY) and from the commodity market (+19.7% YoY). The GPW Group’s net profit increased by 12% quarter on quarter, driven by the aforementioned one-off events.
GPW Group’s revenue from the financial market
The sales revenue from the financial market was PLN 48.9 million in Q3 2017, representing an increase of 4.7% year on year and a decrease of 7% quarter on quarter. The revenue from the financial market contributed 60.2% of the total sales revenue of the GPW Group, compared to 59.9% in Q2 2017 and 63.4% in Q3 2016. The revenue from the financial market includes trading revenue, listing revenue, and revenue from information services.
Trading revenue on the financial market
The trading revenue was PLN 31.9 million in Q3 2017, representing an increase of 3.1% year on year and a decrease of 11.3% quarter on quarter. The year-on-year increase in trading revenue was driven by an increase of nearly all revenue lines. The revenue from trade in shares and equity-related instruments increased by 2.7% year on year and the revenue from trade in debt instruments increased by 17.5% year on year in Q3 2017. The quarter-on-quarter decrease in trading revenue in Q3 2017 was due to seasonally lower investor activity on the financial market.
Listing revenue
The GPW Group’s listing revenue on the financial market was PLN 6.3 million in Q3 2017, representing an increase of 8.4% year on year and an increase of 3.5% quarter on quarter. The listing revenue represented 7.7% of the GPW Group’s total revenue in Q3 2017. Revenues from fees for introduction increased to PLN 1.3 million, i.e., by 58.8% year on year and by 17% quarter on quarter. Revenues from listing fees stood at PLN 4.9 million and were stable year on year and quarter on quarter (-0.2% YoY, +0.3% QoQ).
Information services
The revenue from information services was PLN 10.7 million in Q3 2017, representing an increase of 7.3% year on year and an increase of 1.9% quarter on quarter. The revenue from information services contributed 13.2% to the GPW Group’s total sales revenues. The increase of the revenue from information services was mainly driven by an increase in the number of subscribers, further additions of non-display clients, as well as the start of the sales of WIBOR data.
GPW Group’s revenue from the commodity market
The sales revenue on the commodity market was PLN 32 million in Q3 2017, compared to PLN 26.7 million in Q3 2016, i.e., up by 19.7% year on year, and down by 8% quarter on quarter. It contributed 39.4% to the Group’s total revenues in Q3 2017. The revenue from the commodity market includes trading revenue, revenue from operation of the register of certificates of origin, revenue from clearing, and revenue from information services on the commodity market.
Trading revenue on the commodity market
The trading revenue on the commodity market stood at PLN 16.7 million and increased by 22.7% year on year but decreased by 5.4% quarter on quarter. The year-on-year increase of the revenue included nearly all of the revenue lines, mainly the revenue from trade in gas (up by 148.1% YoY) and the revenue from clearing (up by 25.1% YoY). The quarter-on-quarter decrease of the revenue on the commodity market in Q3 2017 was mainly driven by a decrease of the revenue from trade in property rights by 24.6% QoQ and the revenue from the register of certificates of origin by 25.9%. This was due to seasonally lower activity of certificates market participants in the second half of each year. The revenue from trade in gas stood at PLN 3.4 million, representing an increase of 83.5% quarter on quarter. The revenue from trade in electricity stood at PLN 2.1 million, representing an increase of 6.2% quarter on quarter and a decrease of 8.2% year on year. The GPW Group’s revenue from other fees paid by commodity market participants stood at PLN 2.8 million in Q3 2017 compared to PLN 2.5 million in Q3 2016, representing an increase of 10.7% year on year and an increase of 4.2% quarter on quarter.
Operation of the Register of Certificates of Origin
The revenue from the operation of the Register of Certificates of Origin was PLN 5.8 million in Q3 2017, representing an increase of 5% year on year and a decrease of 25.9% quarter on quarter. The decrease in the revenue from the operation of the Register of Certificates of Origin was mainly driven by smaller numbers of issued certificates.
Clearing
The revenue from clearing was PLN 9.4 million in Q3 2017, representing an increase of 25.1% year on year and an increase of 1.9% quarter on quarter. The increase of revenue was driven mainly by an increase in the volume of forward trade in gas, as well as an increase of trade in property rights year on year. In addition to a higher volume of trade on the gas market, the volume of trade in electricity increased, as well, quarter on quarter.
Information services
The revenue from information services on the commodity market stood at PLN 87 thousand in Q3 2017, representing a decrease of 3.6% year on year and an increase of 0.8% quarter on quarter.
GPW Group’s operating expenses
Operating expenses were PLN 32.5 million in Q3 2017, representing an increase of 15% year on year and a decrease of 13.9% quarter on quarter. The expenses were mainly driven by the release of PLN 5.8 million of provisions for fees due to PFSA. The cost/income ratio was 40.1% in Q3 2017, compared to 38.4% in Q3 2016. Depreciation and amortisation charges stood at PLN 7.3 million in Q3 2017, compared to PLN 6.8 million in Q3 2016 and PLN 7 million in Q2 2017. The increase of depreciation and amortisation charges was driven by the implementation of POLPX’s new trading system. The GPW Group’s salaries increased by 35.1% year in year and 2.9% quarter on quarter to PLN 12.2 million in Q3 2017 due to a bigger headcount and the release of PLN 3.8 million of provisions against bonuses in Q3 2016. External service charges increased to PLN 12.2 million in Q3 2017, compared to PLN 8.4 million in Q3 2016 and PLN 11.7 million in Q2 2017. The increase was mainly driven by POLPX’s costs of advisory services concerning VAT payments, IRGiT’s cost of the application for the CCP status, as well as the cost of harmonisation with the requirements of MiFID II. Other operating expenses stood at PLN 1.2 million (-10.4% QoQ and +5.8% YoY).
Share of profit of associates
The GPW Group’s share of profit of associates was at PLN 3.6 million in Q3 2017, representing an increase of 57.2% year on year and 18.5% quarter on quarter. The share of profit of associates was mainly driven by the earnings of the KDPW Group and Aquis Exchange. KDPW’s profit attributable to GPW was PLN 4.3 million in Q3 2017, compared to PLN 3.2 million in Q3 2016 and PLN 3.5 million in Q2 2017. The multilateral trading facility Aquis Exchange generated a loss in Q3 2017, including a loss attributable to the GPW Group at PLN 0.8 million (compared to a loss of PLN 0.8 million in Q2 2017 and a loss of PLN 1.0 million in Q3 2016).
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The Warsaw Stock Exchange (GPW) is one of the fastest growing securities exchanges in Central and Eastern Europe. GPW operates a regulated market of shares and derivative instruments and the alternative stock market NewConnect for growing companies. GPW is developing Catalyst, a market for issuers of corporate and municipal bonds, as well as commodity markets. The Polish Power Exchange (POLPX), a member of the GPW Group since February 2012, offers trade in electricity, natural gas, property rights, guarantees of origin, and CO2 emission allowances. Since 9 November 2010, GPW is a public company listed on Warsaw Stock Exchange. For more information, visit http://www.gpw.pl
