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BURSA DE VALORI BUCURESTI SA - BVB

Quarterly financial results as of 30 September 2016

Release Date: 11/10/2016 7:54:15 AM

IRIS Code: 292E5

The third quarter of 2016 featured a more intense trading activity, with a wider variety of transactional events and corporate actions. Several transactions on the offers market drove the revenues of the trading segment of BVB Group up by 53%. The main transactions executed during the third quarter of 2016 were: the takeover bid for Albalact, worth of RON 325 mn, the tender offer for Fondul Proprietatea shares of RON 327 mn, the primary offering of government securities issued by the Ministry of Public Finance of RON 735 mn, as well as the bond issue of the International Investment Bank of RON 300 mn.

During the third quarter, BET-TR index, the total return version of the main market index BET, which includes dividends distributed by the most traded companies, climbed by 9.1% in the third quarter. Almost half of the listed companies distributed dividends during 2016, with an average dividend yield of 7%.

The most important event of the quarter was the inclusion of the Romanian capital market by FTSE Russell on the list of countries which have a substantial potential to be upgraded to emerging market status in a short or medium time frame. For Romania, the upgrade will depend on the progress in terms of liquidity and the presence on the market of large companies with significant trading values.

In August, a new and more flexible regulatory framework entered into force, allowing operations of lending and borrowing of shares, short selling and margin buying. BVB and the Central Depository (DC) followed all stages necessary to change their own regulations and received all necessary approvals from the Financial Supervisory Authority (FSA) and the National Bank of Romania (BNR). Shortly, BVB organized the seminar "The use of short selling in investment strategies", where the mechanism and importance for investors of such operations were discussed.

The cost of trading is continuously decreasing in the market. A recent step in this regard was FSA’s decision to reduce the fees applicable to Participants who are registered as Market Makers or Liquidity Providers, starting 1 August. It brings new important improvements to the trading landscape and sets the background for extending such activities.

FSA has decided to reduce the fees applicable to Participants who are registered as Market Makers or Liquidity Providers, starting 1 August. This decision creates the background for extending such activities and enhancing the terms under which these Participants operate on registered financial instruments.

In September, the Bucharest Stock Exchange launched two projects for increasing the retail investor base: the Universal Platform for investors www.fluentinfinante.ro, the largest educational platform in Romania, and the real life trading competition “Driven by return”, the first real-life trading competition in Romania. The competition started on 17 October and will end on 17 February 2017, using all the mechanisms and specific rules for the trading activity at BVB.

On AeRO market, Ascendia (ASC), the Romanian company specialized in eLearning, went public on 7 July 2016. Ascendia creates digital educational products and develops customized educational software and is one of the most creative players in the market for educational applications (eLearning) in Romania. Also, the bonds issued by Bittnet (BNET19), the fifth issue of corporate bonds listed on the alternative trading system of BVB, started trading on AeRO market on 28 September 2016. The company raised RON 4.18 mn in July by selling bonds with three-year maturity and a fixed annual interest rate of 9%, payable quarterly.

The Central Depository registered a 10% increase of the value of trades executed at BVB and settled on a net basis, compared to the third quarter of 2015. During the same period, the Central Depository admitted 10 new issues of financial instruments in its system and operated 16 share capital changes and contributed, along with BVB, to the launch of the universal platform www.fluentinfinante.ro.

·         The Bucharest Stock Exchange Group (BVB Group) reported improved results for the second consecutive quarter. The total value of trades performed at the Bucharest Stock Exchange increased by 36% compared to the year-ago period.

·         Consolidated operating revenues rose by 23%, driven by the 53% hike in revenues generated by BVB’s trading segment to RON 6 mn. Operating expenses for the Group continued to decline, going down by 3%, while the operating profit registered during the third quarter of 2016 increased to RON 2.91 mn.

·         The net consolidated profit of BVB Group rose 2.5 times during the third quarter compared to the year-ago period to RON 2.49 mn, due to better operating performance.

·         On a year-to-date basis, the operating results of BVB Group improved significantly compared to Jan-Sep 2015 given the superior performance of the trading segment of the Group which generated 99% of the period operating profit.

·         The increase above 4% of the consolidated operating revenues, doubled by the more than 4% decline of consolidated operating expenses, resulted in a 78% y-o-y advance of the operating profit to RON 4.15 mn (9 months of 2015: RON 2.32 mn) and an increase of the related margin by 7 percentage points.

·         The consolidated net financial revenue for the first 9 months of 2016 were represented mainly by revenues generated by the Group’s investments in government securities and deposits which reached RON 2.23 mn (9 months of 2015: RON 3.32 mn), lower because of the reduced level of investments held by the company following the payment of 2015 dividends and the decline in yields for government securities and deposits. The decline of the financial result in y-o-y terms was mainly determined by the negative influence of unrealized foreign exchange differences resulted from the monthly revaluation of investments in government securities and deposits of RON 0.86 mn (loss), as compared to the positive influence of foreign exchange differences calculated for the same financial assets of RON 0.54 mn (gains) for the first 9 months of 2015.

·         The net consolidated profit cumulated RON 4.29 mn since the beginning of the year, slightly up compared to the year-ago period, while the net margin remained stable at 19%.

 

Financial performance, consolidated – BVB Group

(RON mn, unless otherwise stated)

9M

2016

9M

2015*

Change (%)

3Q

2016

3Q

2015*

Change (%)

 

 

 

 

 

 

 

Operating revenue

23.30

22.35

4%

9.14

7.44

23%

Operating expenses

19.15

20.03

-4%

6.23

6.41

-3%

Operating profit

4.15

2.32

78%

2.91

1.03

183%

Net financial revenue/(expenses)

1.02

2.73

-62%

0.07

0.21

-68%

Profit before tax

5.17

5.05

2%

2.98

1.24

140%

Profit for the period

4.29

4.20

2%

2.49

1.01

147%

Total comprehensive income

4.09

4.23

-3%

2.53

1.01

151%

EPS attributable to owners (RON/share)

0.5700

0.5266

8%

0.3265

0.1280

155%

* The financial results for the 3rd quarter and first 9 months of 2015 are restated figures in accordance with IFRS and are not audited

 

The full financial report as of 30 September 2016 is available for shareholders, investors and general public as of 10 November 2016, 8:30 local time. The printed version is available at BVB’s headquarters, located in Bucharest, 34-36 Carol I Blvd, 14th floor, district 2, while the online version is available on our website www.bvb.ro, in the “Investor relations” section, at http://www.bvb.ro/InvestorRelations/FinancialFigures/FinancialReports.

 



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