BME posts €47 million net profit, up 11.5% year-on-year

• The best quarterly result in the last seven years
• Revenue for the first quarter stood at €93 million, up 8.2% year-on-year
• EBITDA increased by 8.9% to €66.3 million
• The efficiency ratio and the Return on Equity (ROE) improve 0.4 and 1.6 points respectively compared to a year ago
• Investment flows channelled by the exchange between Janu­ary and  March 2015 amounted to €4.4 billion, ranking second world market by IPOs volume

BME net profit for the first quarter of 2015 totalled €47 million, an increase of 11.5% on the year ago figure. These are the strongest first quarter results since 2008.

Quarterly revenue amounted to €93 million, up 8.2% year-on-year. This increase is underpinned by the strong performance of the Equity, Settlement and Registration, Market Data and Information, and IT and Consulting units. This resulted in an 8.9% year-on-year improvement in EBITDA, which amounted to €66.3 million.

Operating costs totalled €26.8 million, a 6.5% increase on the year ago figure. Without the effect of extraordinary and non-recurring items - mostly due to developments associated with the Reform of the Clearing and settlement system – costs would have fallen by 0.3% 

The efficiency ratio and ROE for the first quarter were 28.8% and 42.7%, respectively, 0.4 and 1.6 points improvement on the previous year. The cost base coverage ratio at the end of the first quarter was 114%. This ratio measures the company’s diversification into revenue sources not associated with market activity. 

Earnings per share in the first quarter was €0.56 compared to the year ago figure of €0.51.

EQUITIES

At the end of the first quarter revenue for the Equity unit was €43.7 million, up 5% year-on-year. EBITDA totalled €34.2 million, a 7.7% increase on the year ago figure.

In the quarter, equity trading continued to improve, reaching €260.8 billion in turnover, 36.7% higher than the same period in 2014.

Total investment flows channelled into the exchange coming from IPOs, between January and March 2015, amounted €4.4 billion, a 323.7% increase on the same period in 2014, ranking second world market by IPOs volume.

Since 31 March 2014, companies admitted to trading on the exchange increased by 6.3%, with a net result of 211 new entities in the market, bringing the total to 3,547 listed companies.

SETTLEMENT

The Settlement unit’s revenue increased by 7.3% in the first quarter of 2015, to €21.7 million. The biggest contribution to revenues of the unit came from the settlement activity, which was up 19.7% and represented 49.9% of the unit’s total.

EBITDA advanced 2.2% in the quarter to €16.8 million.

A total of 14 million transactions were settled in the period, up 3.1% on the number settled during the first quarter of 2014

CLEARING

Revenue at the Clearing unit for the first quarter of 2015 amounted to €4.4 million, a 6.2% decrease on the same period in 2014. Operating costs amounted to €2.5 million, up 58.9%. The increase in operating costs is explained by the greater burden of external costs of developments associated with reform of the Spanish Clearing and Settlement System. As a result, EBITDA declined 39.1% in the quarter to €1.9 million.

The Clearing activity, which involves the clearing and settlement of all electricity market and MEFF financial derivatives, also includes the clearing and settlement of fixed income securities (reverse repos on Spanish government debt).

MARKET DATA

In the first quarter, revenue from the Information unit totalled €9.4 million (+26%) while EBITDA amounted to €8.6 million, a 28% year-on-year increase.

The information from primary sources services is enjoying record figures both in terms of total clients connected as well as direct connections to the source, with figures up 5.9% and 21.2% year-on-year, respectively.

DERIVATIVES

The positive trend continued in the first quarter of 2015, with index derivatives boosting revenue and helping offset the decline in contracts traded in other products. Revenue in the first quarter totalled €3.2 million, down 2.2% on revenue obtained during the same period in 2014. EBITDA was up 1.3% at €1.9 million.

In the first quarter of 2015 contracts on the IBEX 35® continued to follow the positive trend set in 2014. IBEX 35® and Mini IBEX® futures trading rose 9.7% and 26.8% year-on-year, respectively, while IBEX 35® options were down 4.8% on the year ago figure.

FIXED INCOME

The contribution of trading and listing revenue to the unit’s total in the first three months of the year was €2.5 million, triggering a 24.1% overall decline. EBITDA was €1.2 million, a 39.8% decline on the year-ago figure. 

The number of trades suffered a sharp decline compared to the first quarter of 2014 and was affected by low interest rates which put off retail investors while at the same time is limiting interest in new issues. Activity in the primary market was much stronger. The total volume of new issues admitted to listing totalled €126.9 billion, a 31.1% increase on the first quarter of 2014.

IT & CONSULTING 

The activities managed by the IT and Consulting unit generated revenue of €4.6 million in the first quarter, a year-on-year increase of 23.3%. EBITDA totalled €1.8 million, up 73.9%.

The connection service between BME and its HUBs in London concluded in the first quarter. Installation of a point of presence at a new DPC will help reduce latencies and improve the connection. The number of connections is being increased by over 20%.