Gielda Papierów Wartosciowych w Warszawie S A : GPW Group’s Record-high Revenue in Q2 2020

2020-08-14 16:29:11

PRESS RELEASE

• GPW Group's revenue at PLN 101.1 million in Q2 2020
• EBITDA at PLN 63.2 million in Q2 2020
• Operating profit at PLN 54.1 million in Q2 2020
• Net profit at PLN 43.5 million in Q2 2020
• GPW's Annual General Meeting approved a dividend payment of PLN 100.7 million (PLN 2,40 per share)

The Warsaw Stock Exchange (GPW) Group generated revenues of PLN 101.1 million and a net profit of PLN 43.5 million in Q2 2020. Its EBITDA was 63.2 million in Q2 2020. The consolidated sales revenues increased by 13.5% year on year and by 4.2% quarter on quarter in Q2 2020.

The year-on-year increase of the revenues was driven by an increase of the revenue on the financial market by PLN 15.2 million (33.5%). That increase was driven mainly by an increase of the trading revenue on the financial market by PLN 15.6 million owing to an increase of the revenue from trading in shares and equity-related instruments by PLN 14.6 million as well as an increase of the revenue from trading in derivatives by PLN 1.3 million. The revenue from information services increased by PLN 0.9 million (7.7% year on year).

The Group's revenue from the commodity market decreased by 7.7% year on year and increased by 5.1% quarter on quarter in Q2 2020. The trading revenue decreased by 12.4%, i.e., by PLN 2.8 million year on year. The decrease of the revenue was mainly due to a decrease of the turnover in property rights in certificates of origin by PLN 4.2 million, i.e., 33.7% year on year, and by the absence of revenue from trading in cogeneration property rights as their trading stopped as of 30 June 2019.

'Q2 2020 broke new records, including an all-time high turnover, very strong activity of individual investors, as well as online IPOs. We are consistently implementing our key strategic initiatives even though most of the GPW Group staff work remotely due to the pandemic. We are all learning how to achieve ambitious goals and maintain high productivity under demanding conditions in the environment. We are focusing on the development of those business segments of the exchange that will make our organisation even more resilient to market cycles as a part of the #GPW2022 strategic framework,' said Marek Dietl, CEO of the GPW Management Board.

Operating expenses stood at PLN 45 million in Q2 2020, an increase of 4.0% year on year and a decrease of 19.6% quarter on quarter. The cost/income ratio (C/I) was 44.5% vs. 48.6% in Q2 2019 and 57.8% in Q1 2020.

In Q2 2020, the GPW Annual General Meeting approved a dividend payment of PLN 100.7 million, i.e., PLN 2.40 per share, representing 93.2% of the consolidated net profit of GPW for the financial year 2019 attributable to GPW's shareholders, adjusted for the share of profit of associates. The dividend record date was 28 July and the dividend payment date was 11 August 2020.

Presentation of the GPW Group's financial results for Q2 2020

Net profit

The net profit of the GPW Group was PLN 43.5 million in Q2 2020, an increase of 2.2% year on year and an increase of 48.6% quarter on quarter. The year-on-year increase of the net profit was mainly driven by a higher turnover on the market in shares and derivatives. The increase of the net profit was driven by an increase of the operating profit by PLN 5.9 million.

Revenue from the financial market

The sales revenue on the financial market stood at PLN 60.7 million in Q2 2020, representing an increase of 33.5% year on year and an increase of 3.3% quarter on quarter. The revenue on the financial market contributed 60.0% of the total sales revenue of the GPW Group. The revenue on the financial market includes trading revenue, listing revenue, and revenue from information services.

Trading revenue on the financial market

The trading revenue on the financial market was PLN 44.0 million in Q2 2020 compared to PLN 28.4 million in Q2 2019, representing an increase of 54.9% year on year and an increase of 6.1% quarter on quarter. The revenue was mainly driven by an increase in revenue from trading in shares and an increase in revenue from trading in derivatives. The revenue from trading in shares increased by 70.1% year on year and by 11.2% quarter on quarter. The revenue from trading in derivatives increased by 54.5% year on year and decreased by 16.1% quarter on quarter.

Listing revenue

The GPW Group's listing revenue on the financial market stood at PLN 3.8 million in Q2 2020 compared to PLN 5.1 million in Q2 2019 and PLN 5.4 million in Q1 2020. The revenue from listing fees stood at PLN 4.1 million in Q2 2020 (-5.4% year on year and -9.9% quarter on quarter). The main driver of listing revenue is the number of issuers listed on GPW's markets as well as their capitalisation at previous year's end. The revenue from fees for introduction and other fees stood at (PLN 0.3 million) compared to PLN 0.7 million in Q2 2019 and PLN 0.8 million in Q1 2020. The main driver of this revenue line is the number of new listings on the GPW markets and the value of shares and bonds introduced into trading. The decrease of the revenue from fees for introduction was due among others to the application of IFRS 15 Revenue from Contracts with Customers and the distribution of revenue from fees for introduction over time.

There were 5 IPOs on the Warsaw Stock Exchange in H1 2020 compared to 9 IPOs in H1 2010. The total value of IPOs on the GPW Main Market and NewConnect stood at PLN 27.0 million in H1 2020. The only new listing on the GPW Main Market was the computer game producer and publisher Games Operators S.A., which was newly listed in April 2020 and raised PLN 24.2 million in an offering.

Information services

The revenue from information services on the financial market stood at PLN 12.9 million in Q2 2020, representing an increase of 7.7% year on year and 8.8% quarter on quarter. The revenue from information services on the commodity market also increased and stood at PLN 0.3 million in Q2 2020. The total revenue from information services on the financial market and the commodity market contributed 13.0% of the GPW Group's total sales revenues.

Revenue from the commodity market

The sales revenue on the commodity market stood at PLN 40.1 million in Q2 2020, a decrease of 7.7% year on year and an increase of 5.1% quarter on quarter. It contributed 39.7% to the GPW Group's total revenues in Q1 2020. The revenue on the commodity market includes trading revenue, revenue from operation of the register of certificates of origin, and revenue from clearing.

Trading revenue on the commodity market

The trading revenue on the commodity market decreased by 12.4% year on year and increased by 2.3% quarter on quarter to PLN 19.3 million in Q2 2020. The revenue from trading in electricity stood at PLN 4.7 million in Q2 2020, an increase of 34.4% year on year and a decrease of 3.3% quarter on quarter. The revenue from trading in gas decreased by 4.1% year on year and by 11.6% quarter on quarter to PLN 3.0 million in Q2 2020. The revenue from trading in property rights of certificates of origin decreased by 33.7% year on year and increased by 14.1% quarter on quarter to PLN 8.3 million. The Group's revenue from other fees paid by commodity market participants stood at PLN 3.4 million in Q2 2020, an increase of 13.0% year on year and a decrease of 1.2% quarter on quarter. The amount of other fees paid by commodity market participants depends largely on the number and the activity of IRGiT Members, in particular the number of transactions.

Operation of the Register of Certificates of Origin

The revenue from the operation of the Register of Certificates of Origin stood at PLN 9.1 million in Q2 2020, representing an increase of 1.6% year on year and an increase of 55.2% quarter on quarter. The quarter-on-quarter increase in the revenue by PLN 3.2 million was mainly driven by an increase in the volumes of issued RES property rights (8.3 TWh vs. 6.0 TWh in Q1 2020) and cancelled RES property rights (12.8 TWh vs. 4.4 TWh in Q1 2020).

Clearing

The Group earns revenues from clearing carried out by TGE's subsidiary IRGiT. The revenue from clearing stood at PLN 11.4 million in Q2 2020, representing a decrease of 6.9% year on year and a decrease of 13.2% quarter on quarter. The change of the revenue was driven by turnover volumes on the markets operated by TGE.

GPW Group's operating expenses

The GPW Group's operating expenses stood at PLN 45.0 million in Q2 2020, an increase of 4.0% year on year and a decrease of 19.6% quarter on quarter. The year-on-year increase of operating expenses was driven by an increase of salaries and other employee costs.

Depreciation and amortisation decreased by 3.6% year on year and 7.0% quarter on quarter to PLN 9.1 million. The year-on-year decrease in depreciation and amortisation was mainly driven by lower depreciation and amortisation charges in GPW.

Salaries and other employee costs stood at PLN 22.3 million, an increase of 15.5% year on year and an increase of 0.1% quarter on quarter. The increase in salaries and other employee costs was mainly driven by gradual increase in the Group's headcount due to increasing workload in the implementation of development initiatives under the strategy #GPW2022.

The GPW Group's cost of rent stood at PLN 1.1 million in Q2 2020, an increase of 1.2% year on year and an increase of 1.8% quarter on quarter.

External service charges stood at PLN 11.3 million in Q2 2020, a decrease of 2.3% year on year and 1.1% quarter on quarter.

Share of profit of entities measured by the equity method

The GPW Group's share of profit of entities measured by the entity method stood at PLN 4.4 million in Q2 2020 compared to PLN 3.6 million in Q2 2019 and PLN 2.0 million in Q1 2020. The year-on-year increase was driven by a higher profit of the KDPW Group following an increase of its operating income.

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The Warsaw Stock Exchange Group (GPW Group) operates trading platforms for shares, Treasury and corporate bonds, derivatives, electricity and gas, and provides indices and benchmarks including WIBOR and WIBID. The index agent FTSE Russell classifies the Polish capital market as a Developed Market since 2018. The markets operated by the GPW Group are the biggest in Central and Eastern Europe. For more information, visit www.gpw.pl