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Excellent Q3 2023 Financial Performance

2023-11-10 12:32:04

PRESS RELEASE

  • Revenue of the GPW Group was PLN 106.1 million in Q3 2023 (+19.9% YoY) and PLN 329.0 million in 9M 2023 (+10.5% YoY)
  • Revenue of the new business lines (Armenia Securities Exchange and GPW Logistics) at PLN 10.5 million in Q3 2023 and PLN 29.5 million in 9M 2023
  • EBITDA at PLN 39.7 million in Q3 2023 (+36.1% YoY) and PLN 118.5 million in 9M 2023 (-6.4% YoY)
  • Net profit attributable to the owners of the parent entity at PLN 39.7 million in Q3 2023 (+27.5% YoY) and PLN 111.3 million in 9M 2023 (+3.7% YoY)

The Warsaw Stock Exchange Group (GPW Group) generated revenues of PLN 329.0 million in 9M 2023, its EBITDA was PLN 118.5 million, operating profit PLN 94.8 million, and net profit attributable to the owners of the parent entity PLN 111.3 million. Consolidated revenue increased by 10.5% year on year in 9M 2023. Revenue from the financial market increased (PLN 198.1 million, +4.1% YoY), as did revenue from the commodity market (PLN 116.7 million, +11.0% YoY). The GPW Group’s revenue growth was also driven by revenue from the new business lines (Armenia Securities Exchange (AMX) and GPW Logistics) which totalled PLN 29.5 million in 9M 2023. The 3.7% year-on-year increase in net profit attributable to the owners of the parent entity in 9M 2023 was due among others to a higher positive balance of financial income and expenses (PLN 17.2 million, +48.4% YoY) and a higher share of profit of entities measured by the equity method (PLN 23.8 million, +14.8% YoY).

In Q3 2023 alone, the GPW Group’s sales revenue was PLN 106.1 million, its EBITDA was PLN 39.7 million, operating profit PLN 32.7 million, and net profit attributable to the owners of the parent entity PLN 39.7 million. Consolidated revenue increased by 19.9% year on year in Q3 2023. The increase was driven by higher revenue on the financial market (PLN 65.7 million, +13.4% YoY) and the commodity market (PLN 35.6 million, +19.3% YoY), as well as by revenue from the new business lines (totalling PLN 10.5 million in Q3 2023).

“This is the first time in our history that our revenue is more than PLN 100 million in each of the three quarters of the year. GPW’s cumulative revenue in 2017-2022 increased by 25 percent compared to 2011-2016. These financial figures confirm that the growth strategy we have been pursuing since 2018 is yielding the expected results,” said Marek Dietl, President of the GPW Management Board.

The potential and stability of the GPW Group is also corroborated by the dividend paid to shareholders every year since the company’s IPO.

“Since 2010, GPW has paid a total of more than PLN 1.23 billion to shareholders. More than 60 percent of this amount has been paid to shareholders during my term in office,” said Marek Dietl, President of the GPW Management Board.

The GPW Group’s revenue from the financial market stood at PLN 65.7 million in Q3 2023, an increase of 13.4% year on year, mainly driven by the revenue of AMX (PLN 6.0 million) and an increase in revenue from trading in equities (PLN 29.0 million, +9.7% YoY). Listing revenue stood at PLN 5.5 million (-0.2% YoY) while revenue from information services on the financial market stood at PLN 14.2 million (-0.6% YoY).

Revenue of the Group from the commodity market stood at PLN 35.6 million in Q3 2023, an increase of 19.3% year on year. The increase was mainly driven by record-high quarterly revenue from trading in electricity (PLN 7.9 million, +135.1% YoY) and higher revenue from clearing (PLN 10.4 million, +24.9% YoY).

Operating expenses increased by 25.7% year on year to PLN 74.6 million in Q3 2023. The increase was driven by higher total employee costs (PLN 38.1 million, +33.1% YoY) and external service charges (PLN 25.2 million, +36.1% YoY).

Presentation of the financial results of the GPW Group for Q3 2023

Net profit

Net profit attributable to the owners of the parent entity of the GPW Group was PLN 39.7 million in Q3 2023, an increase of 27.5% year on year. The increase of the GPW Group’s net profit was driven among others by a record-high share of profit of entities measured by the equity method at PLN 10.3 million vs. PLN 8.3 million in Q3 2022.

Revenue from the financial market

The sales revenue from the financial market stood at PLN 65.7 million in Q3 2023 vs. PLN 58.0 million in Q3 2022 and PLN 65.9 million in Q2 2023. The revenue from the financial market contributed 62.0% of the total sales revenue of the GPW Group in Q3 2023.

The revenue from the financial market includes trading revenue, listing revenue, revenue from information services, and revenue of the Armenia Securities Exchange.

  • Trading revenue on the financial market
    The trading revenue on the financial market stood at PLN 40.1 million in Q3 2023 vs. PLN 38.2 million in Q3 2022 and PLN 38.7 million in Q2 2023.
    The year-on-year increase in the trading revenue on the financial market was driven by higher revenue from trading in equities (PLN 29.0 million, +9.7% YoY).
  • Listing revenue
    The GPW Group’s listing revenue on the financial market was PLN 5.5 million in Q3 2023 vs. PLN 5.5 million in Q3 2022 and PLN 5.8 million in Q2 2023. Listing revenue includes annual listing fees, introduction fees and other charges. Revenues therefore mainly depend on IPO/SPO activity, the number of issuers and the capitalisation of companies.
    No companies were newly listed on the GPW Main Market in Q3 2023 but there were three IPOs on NewConnect. The total value of IPOs and SPOs on both markets amounted to PLN 652.6 million vs. PLN 356.6 million in Q3 2022. The combined capitalisation of domestic and foreign companies listed on both GPW stock markets amounted to PLN 1,332.3 billion as at 30 September 2023 vs. PLN 978.1 billion as at 30 September 2022.
  • Information services on the financial market
    The revenue from information services on the financial market stood at PLN 14.2 million in Q3 2023 vs. PLN 14.3 million in Q3 2022 and PLN 15.2 million in Q2 2023. GPW had 586,200 data subscribers as at 30 September 2023 vs. 522,500 as at 30 September 2022.
  • AMX
    AMX’s revenue was PLN 6.0 million in Q3 2023 vs. PLN 6.2 million in Q2 2023. Revenue from AMX’s depository business was PLN 5.0 million vs. PLN 5.2 million in Q2 2023, and revenue from its exchange business was PLN 0.9 million vs. PLN 1.0 million in Q2 2023.

Revenue from the commodity market

The sales revenue on the commodity market was PLN 35.6 million in Q3 2023, an increase of 19.3% year on year and a decrease of 10.4% quarter on quarter. It contributed 33.5% of the Group’s total revenues in Q3 2023. 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.

  • Trading revenue on the commodity market
    The trading revenue on the commodity market stood at PLN 20.0 million in Q3 2023, an increase of 26.5% year on year and a decrease of 6.3% quarter on quarter. The year-on-year increase in trading revenue was mainly driven by a raise of transaction fees on the electricity and gas markets effective during 2023.
    The revenue from trade in electricity was record-high at PLN 7.9 million in Q3 2023 vs. PLN 3.4 million in Q3 2022 and PLN 6.6 million in Q2 2023.
    The revenue from trade in gas stood at PLN 3.2 million, an increase of 56.7% year on year and 25.3% quarter on quarter.
    The revenue from trade in property rights stood at PLN 3.9 million in Q3 2023, representing a decrease of 22.4% year on year and 45.3% quarter on quarter.
    The TGE Group’s revenue from other fees paid by commodity market participants stood at PLN 5.0 million in Q3 2023, a decrease of 7.4% year on year and 2.4% 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 4.7 million in Q3 2023, representing a decrease of 12.6% year on year and a decrease of 28.5% quarter on quarter. The year-on-year decrease was mainly due to fewer green certificate redemptions and, secondarily, less trading in green certificates.
  • Clearing
    The Group earns its revenue from clearing conducted by IRGiT, a subsidiary of TGE. The revenue from clearing depends on the volume of trading on the markets operated by TGE. The revenue from clearing was PLN 10.4 million in Q3 2023, an increase of 24.9% year on year and a decrease of 9.1% quarter on quarter.
  • TGE Group information services
    The revenue from information services stood at PLN 507,000 in Q3 2023, an increase of 57.5% year on year and an increase of 35.2% quarter on quarter.

Other revenue

The GPW Group’s other revenue stood at PLN 4.8 million in Q3 2023 (including mainly GPW Logistics at PLN 4.5 million) vs. PLN 0.7 million in Q3 2022 and PLN 5.1 million in Q2 2023.

Operating expenses

The GPW Group’s operating expenses stood at PLN 74.6 million in Q3 2023 vs. PLN 59.3 million in Q3 2022, representing an increase of 25.7% year on year. Operating expenses decreased by 0.6% quarter on quarter.

Total employee costs stood at PLN 38.1 million in Q3 2023 vs. PLN 28.6 million in Q3 2022, an increase of PLN 33.1% year on year and 15.8% quarter on quarter. The year-on-year increase was driven by an increase of salaries, a one-off inflation benefit for GPW employees, and an increase in employment of the GPW Group related to the implementation of strategic initiatives (mainly the AMX acquisition).

External service charges stood at PLN 25.2 million in Q3 2023 vs. PLN 18.5 million in Q3 2022, an increase of 36.1% year on year. External service charges decreased by 13.0% quarter on quarter. The year-on-year increase was mainly driven by an increase in the costs from the consolidation of GPW Logistics (PLN 4.2 million vs. PLN 33,000), external service charges at AMX (PLN 2.0 million), and an increase of IT expenses (PLN 11.2 million vs. PLN 9.3 million). Other operating expenses stood at PLN 2.3 million, an increase of 45.0% year on year and a decrease of 27.7% quarter on quarter.

Share of profit of entities measured by the equity method

The GPW Group’s quarterly share of profit of entities measured by the equity method was historically high and stood at PLN 10.3 million in Q3 2023 vs. PLN 8.3 million in Q3 2022. The share of profit of entities measured by the equity method is mainly driven by profits of the KDPW Group. The profit of the KDPW Group attributable to GPW was PLN 10.2 million vs. PLN 8.2 million in Q3 2022. The improvement in the KDPW Group’s financial performance was driven among others by an increase in revenue from the management and administration of guarantee funds due to high interest rates and an increase in revenue from the depository business due to the higher capitalisation of shares of companies listed on the GPW markets.

The share of profit of Centrum Giełdowe was PLN 109,000 vs. a share of profit at PLN 123,000 in Q3 2022.

***

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.