Individual and consolidated results of BVB Group as of first half of 2021
Bucharest Stock Exchange (BVB)
Operating income BVB individual* in 1H 2021, decreased by 6% or 0.74 mn lei, from 12.44 mn lei to 11.70 mn lei, the basic effect is the decrease of the “one-off” revenues recorded in Q1 2020 from intra-group re-invoicing (0.97 mn lei), a decrease partialy offset by the increase in revenues from issuers maintaining fees and sale of stock exchange data. Trading revenues were mainly influenced by a lower volatility compared to 2020 and implicitly a total value of transactions on the main stock market lower by 14%, by the decrease of revenues from public offerings - shares of 46%, while revenues from trading on the AERO market have increased 4 times.
Operating expenses, BVB individual*, 1H 2021, increase by 8% or 0.64 mn lei from 8.13 to 8.77 mn lei, following the reduction in Q2 2020 of the promotion expenses due to the restrictions generated by COVID-19 pandemic and the launch in the second half of 2020 new projects from 2021 aimed to promote BVB and the capital market, respectively issuers, the most important being the BVB Research HUB & BVB ESG projects.
Operating profit BVB individual * 1H 2021, was 2.93 mn lei, -32% compared to 1H 2020 (1H 2020: 4.31 mn lei), with an operating margin of 25%, decreased caused by the reduction of revenues operational by 6%, as well as the increase of operational expenses by 8%. This includes intra-group transactions (for trading segment values, excluding intra-group transactions - see Note 6 Segment reporting)
Net financial income, BVB individual * - 1H 2021 was 1.33 mn lei (1H 2020: 1.8 mn lei), -26%, or 0.47 mn lei, decrease mainly due to the reduction income from dividends registered with the Central Depository for the results of 2020.
Net profit, BVB individual * 1H 2021, 3.57 mn lei, -33% or 1.78 mn lei from 5.35 mn lei in 1H 2020, with a net margin of 31%. This includes intra-group transactions (for trading segment values, excluding intra-group transactions - see Note 6 Segment reporting)
Central Depository (DC)
Operating revenues DC individual * increased by 21%, 1.63 mn lei (from 7.83 mn lei to 9.46 mn lei), as a result of providing one-off services on the registry segment and the increase of revenues from maintaining the quality of custodian agent, result of the increase of the share prices and of the value of the portfolios held with a favorable impact of 0.94 mn lei.
Operating expenses, DC individual*, are 7.71 mn lei, an increase of 9% compared to 1H 2020 (7.04 mn lei) generated by the advance of IT maintenance expenses, amortization of investments in intangible assets carried out in recent years, expenses with new projects in progress and staff costs, according to the remuneration policy.
Operating profit, DC individual * - increase of 119%, up to the value of 1.75 mn lei (1H 2020: 0.8 mn lei), with an operating margin of 19%. result of the increase of the operational revenues by 21% while the operational expenses registered an advance of 9%. This includes intra-group transactions (for post-trade segment and register values, excluding intra-group transactions - see Note 6 Segment reporting)
Net financial income, individual DC * - decrease of 6% up to the value of 0.27 mn lei.
Net profit, DC individual * - 1.73 mn lei, significant increase (+ 80%) compared to the similar period of 2020 (1H 2020: 0.96 mn lei), as a result of the positive impact generated by the increase in operating revenues.
CCP.RO Bucharest (CCP.RO)
CCP.RO Bucharest did not register operational revenues, being in the process of submitting the authorization file as Central Counterparty.
Operational expenses, CCP.RO individual, 3.50 mn lei (1H 2020: 1.61 mn lei), the operating bases of the new branch were put in the second part of 2020, by hiring staff and concluding of contracts related to the start of the authorization process as a Central Counterparty. The main expenses in 1H 2021 were the expenses registered with the CC&G consultancy and the personnel expenses related to the team involved in the authorization process.
Operational loss CCP.RO individual * of 3.5 mn lei, similar evolution with that of operational expenses considering that the company did not record operating revenues.
Net financial income, CCP.RO individual* is 1.08 mn lei, +0.55 mn lei compared to the value registered in H1 2020 (0.53 mn lei) generated by the increase of the exchange rate RON/ EUR which generated a gain from unrealized exchange rate differences for the company's 10 mn euro investments.
Net loss, CCP.RO individual* - 2.04 mn lei (1H 2020: 1.08 mn lei) generated by a higher operating loss, partially covered by the financial profit advance.
Investor Compensation Fund (FCI)
The net loss of FCI individual in 1H 2021, is in amount of 131 thousand lei, compared to 35 thousand lei, profit, in 1H 2020 is presented on the line "Profit from discontinued operations as a result of the classification of the Investor Compensation Fund as an entity" with discontinue activity ”, according to IFRS 5, following the publication of Law 88/2021 by which the current Company will be transformed into a legal entity under public law. BVB will stop consolidating FCI's results from the moment it loses control over the company. In July, FCI started the proceedings to return to the shareholders the value of the shares held in the company's share capital. Starting with the date of collection of the equivalent value of the shares held by BVB in FCI, FCI will no longer be considered a subsidiary of BVB.
BVB Group - consolidated
The consolidated operating revenues of the BVB Group in 1H 2021 were of 20.93 mn lei (1H 2020: 19.58 mn lei), an increase of 7% or 1.35 mn lei, generated by significant advance of the revenues of the post segment -transaction.
Consolidated operating expenses – increase by 23% in 1H 2021, respectively 3.77 mn lei, from 16.04 mn lei to 19.81 mn lei mainly, as a result of the advance of expenses generated by the activity of the CCP.RO subsidiary, started in the second part of 2020 (impact in 2021 of 3.5 mn lei), and of a higher level of expenses with services provided by third parties, result of the new projects developed at the level of the BVB Group.
Consolidated operating profit of the BVB Group of 1.12 mn lei, decreasing from 3.54 mn lei in 1H 2020, decrease generated by the advance of the consolidated operational expenses registered, mainly, by the projects developed at the level of the BVB Group, as the Central Counterparty project, being implemented through the CCP.RO branch.
Consolidated net financial income + 32% compared to 1H 2020, from 1.58 mn lei to 2.09 mn lei, mainly as a result of a gain from unrealized exchange rate differences from the revaluation of financial instruments in foreign currency of 0. 88 mn lei vs 0.05 mn lei in 1H 2020, effect of the increase of the exchange rate Leu / EUR and Leu / USD.
Consolidated net profit of the BVB Group in 1H 2021, -39% or 1.67 mn lei, from 4.24 mn lei to 2.57 mn lei, being directly influenced by the decrease of the operational result, a decrease partially offset by the evolution favorable financial result.
* before consolidation, including intra-group transactions