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BURSA DE VALORI BUCURESTI SA - BVB

Preliminary financial results as of December 31, 2020

Release Date: 2/24/2021 8:30:14 AM

IRIS Code: F13D5

Executive summary

Key events

Ø BET Total Return index rallied 10% in Q4 up to 16,509.64 points and closed the year 2020 in positive territory, 3.4% higher compared to end-2019.

Ø Record liquidity on BVB in 2020, total volumes reaching 18.3 billion RON (3.77 bln EUR). This is the highest ever traded value, 25% above the previous record set in 2017.

Ø The activity on BVB’s primary markets accelerated in Q4. 6 new bonds and 2 new stocks were listed in this period, including a new issuance of Government bonds under the Fidelis program which raised a record of RON 2.7bn from the local individual investors.

Ø The project aiming to digitalize the main capital market institutions reached an important milestone as the Central Depository, part of BVB Group, signed an agreement with the technology company Aurachain. In the first stage of this collaboration, the objective is to implement a fully digital solution for GSM voting and also a fully online KYC process for individual investors. The solutions provided by Aurachain are based on low code technology and DLT (blockchain).

Ø BVB celebrated its 25th anniversary on November 20th. On this occasion, BVB organized a series of online events focused on the main developments and milestones in its short but exciting history.

Evolution of financial performance, 12M 2020 - consolidated results BVB Group

Ø Consolidated operating revenues of the BVB Group in 12M 2020 were 42.24 mn lei (12L 2019: 34.96 mn lei), + 21% or +7.27 mn lei, an increase influenced by all business segments of the Group.

Ø Revenues from the trading segment (BVB) increased by 35%, +6.98 mn lei (from 19.68 mn lei to 26.66 mn lei) as a result of the increase of the values ​​traded on the main shares market, both regular transactions as well as offers.

Ø Revenues related to the post-trading segment (DC) increased by 7% (from 14.97 lei to 15.97 mn lei) due to the increase of revenues from maintaining the quality of custodian in the DC system, but also to the increase of revenues from settlement, influenced by the increase of the values ​​traded at BVB, the revenues related to the register segment (DC) also increased by 9%, from 4.66 mn lei to 5.09 mn lei, mainly due to the registration of revenues of one-off type

12 M individual results*:

Ø Trading revenues - BVB individual, increased by 39%, + 5.67 mn lei (from 14.44 mn lei to 20.11 mn lei) mainly due to the advance of revenues related to trading on the market main actions both regular transactions and offers

* including intra-group transactions

Ø Revenues DC Individual*, increased by 7%, + 1 mn lei in 12M 2020 compared to 12M 2019, from 14.97 mn lei to 15.97 mn lei, as a result of the increase of revenues from maintaining the quality of custodian in the DC system, of the settlement income and of the income related to the register segment

Ø CCP.RO Bucharest did not register operational revenues

Ø Consolidated operating expenses 12M  2020, + 18%, respectively 5.6 mn lei, from 31.16 mn lei to 36.76 mn lei, mainly as a result of the advance of personnel expenses by 3.31 mn leidue to the registration of 1.21 mn lei personnel expenses of the new subsidiary CCP.RO (0.03 mn lei in 2019) and the advance of salary expenses, following of the application of the Remuneration Policy at the level of the BVB Group, of the expenses with the services provided by third parties by 1.94 mn lei, mainly consulting expenses related to the authorization process of CCP.RO, as well as other operational expenses by 0.35 mn lei, additional expenses incurred in the current pandemic context, both in the IT area as well as in the area of ​​preventing the spread of the SARS COV2 virus

12M individual results*:

Ø Operational expenses, individual BVB *, 12M 2020, + 7% from 16.62 to 17.71 mn lei, as a result of the increase in personnel expenses amid the annual salary adjustment according to the Remuneration Policy and the registration of bonuses and estimated for the results of 2020, the advance of expenditure provided by third parties, mainly consulting, an advance partially covered by the reduction of other operational expenditure.

Ø Operational expenses, individual DC, 12M 2020, + 10% or 1.45 mn lei, from 13.86 million lei to 15.31 mn lei, mainly influenced by the increase of personnel expenses, amid the annual adjustment of salaries according to the Remuneration Policy and of the expenses provided by third parties, together generating an advance of 1.24 mn lei

Ø Operational expenses, individual CCP.RO, 12M 2020, 4.22 mn lei (2019: 0.15 mn lei), in 2020 the operating bases of the new branch were laid by hiring staff and concluding related contracts starting the authorization process as a Central Counterparty

Ø Consolidated operating profit of the BVB Group – 12M 2020, + 44%, from 3.8 mn lei to 5.47 mn lei, as a result of the advance of operating revenues by 21% while the advance of operating expenses was 18%

Ø Operational profit, individual BVB * - 12M 2020, + 192%, from 3.06 mn lei to 8.95 mn lei, with an operational margin of 34%. This includes intra-group transactions (for trading segment values, excluding intra-group transactions - see Note 6 Segment reporting

Ø Operational profit, individual DC * - 12M 2020, -41 %%, from 1.11 mn lei to 0.66 mn lei, with an operating margin of 4%. This includes intra-group transactions (for post-trade segment and register values, excluding intra-group transactions - see Note 6 Segment reporting)

Ø Operational loss of individual CCP.RO * - 12M 2020, 4.21 mn lei. This includes intra-group transactions (for post-trade segment and register values, excluding intra-group transactions - see Note 6 Segment reporting)

Ø Consolidated net financial income – 12M 2020, -55%, decrease from 4.19 mn lei to 1.88 mn lei, mainly as a result of a loss from unrealized exchange rate differences from the revaluation of financial instruments in foreign currency , loss of 0.35 mn lei vs. a profit of 1.02 mn lei in 12L 2019, of the increase of the estimates for anticipated credit losses according to IFRS 9, on the background of the increase of the CSD (Credit Default Swap) 12M for Romania, with an impact of 0.66 mn lei, but also due to the registration of one-off revenues of 0.54 mn lei, from the sale of government securities in Q3 2019, revenues that were not registered in 2020.

Ø Net financial income, BVB individual – 12M 2020, -67% or 3.33 mn lei, from 4.95 mn lei to 1.62 mn lei influenced both by the reduction of interest income and unrealized differences of exchange rate from the revaluation of financial instruments in foreign currency, the effect of the decrease of the value of investments in government securities and deposits as a result of the investment of 10 million Euro in the share capital of CCP.RO. For trading segment values, excluding dividend income from the Central Depository - see Note 6 Segment reporting

Ø  Net financial income, DC individual* - 12M 2020, -53% or 0.37 mn lei, from 0.69 mn lei to 0.33 mn lei. For post-trade segment and register values ​​- see Note 6 Segment reporting

Ø  Net financial income, individual CCP.RO * - 12M 2020, 1.07 mn lei. For post-trade segment and register values ​​- see Note 6 Segment reporting

Ø  Consolidated net profit of the BVB Group – 12M 2020, -7%, from 6.72 mn lei to 6.26 mn lei, being generated mainly by the trading segment of the Group

Ø  Net profit, BVB individual* - 12M 2020, + 31%, from 6.96 mn lei to 9.12 mn lei, with a net margin of 34%. This includes intra-group transactions (for trading segment values, excluding intra-group transactions - see Note 6 Segment reporting)

Ø  Net profit, DC individual* - 12M 2020, -44%, from 1.59 mn lei to 0.88 mn lei, with a net margin of 6%. This includes intra-group transactions (for post-trade segment and register values, excluding intra-group transactions - see Note 6 Segment reporting)

Ø  Net loss, individual CCP.RO * - 12M 2020, of 2.7 mn lei, loss registered according to the forecasts from the Business Plan of the CCP Project. This includes intra-group transactions (for post-trade segment and register values, excluding intra-group transactions - see Note 6 Segment reporting)

 

* including intra-group transactions

 

Financial and operating highlights

 

Consolidated financial performance – BVB Group (RON mn, unless otherwise stated)

 

 

2020 (prelim)

12M

2019

Change (%)

4Q

2020 (prelim)

4Q

2019

Change (%)

 

 

 

 

 

 

 

Operating revenue

 42.24

 34.96

21%

 10.61

 8.51

25%

Operating expenses

 36.76

 31.16

18%

12.32

 8.73

41%

Operating profit

 5.47

 3.80

44%

 (1.71)

 (0.22)

679%

Operating margin

13%

11%

 

-16%

-3%

 

Net financial revenue/(expenses)

 1.89

 4.19

-55%

 (0.33)

 0.26

-230%

Profit before tax

7.36

 8.05

-9%

 (2.05)

 0.04

-5.605%

Profit for the period

 6.26

 6.72

-7%

 (1.65)

 0.03

-6.134%

Net margin

15%

19%

 

-16%

-0%

 

EPS attributable to owners (RON/share)

0.8805

0.7959

11%

(0.1062)

0.0114

-1.030%

Return on equity

4%

4%

 

-1%

0%

 

 

 

Bucharest Stock Exchange (BVB) informs that the Financial Report as of December 31, 2020 shall be available for shareholders, investors and general public as of February 24, 2021, 8:30AM local time. The printed version shall be available at BVB’s headquarters, located in Bucharest, 34-36 Carol I Blvd, 14th floor, district 2, and the online version shall be available on our website www.bvb.ro, in the “Investor relations/Financial figures/Financial statements” section, at http://www.bvb.ro/InvestorRelations/FinancialFigures/FinancialReports.

The video conference for presenting the financial results as of December 31, 2020 shall take place on February 24, 2021, 12:00 local time. For joining the video-conference please contact us at ir@bvb.ro.

 

 



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