BVB - revenues and profit down, in the first nine months of the year

The Bucharest Stock Exchange (BVB), the operator of our capital market, achieved a consolidated net profit of 10.4 million lei in the first nine months of the year, 52% below that of the same period last year, while operating revenues were 57.3 million lei, down 4%, according to the issuer's report published yesterday on its own website.

On an individual level, BVB's net profit was almost 11.1 million lei, 39% below that of the January-September 2023 period, while operating revenues depreciated by 18%, up to 30 million lei. According to the report, the decline in revenues appeared against the background of the initial public offering of the Hidroelectrica company, held in July 2023, which generated revenues of 12.5 million lei, and the trading revenues of approximately two million lei made in the month of listing. In contrast, revenues from transactions in the regular equity market realized in 2024 increased by 23%, based on higher trading volumes in the first part of 2024, as an effect of increased liquidity in the market and a larger number of investors , according to BVB.

The value of all transactions, including offers, amounted to almost 25.5 billion lei, down 5% compared to the first nine months of the year, of which the value of transactions with shares, units and rights was 13.9 billion lei , 30% lower than that in the January-September 2023 period. The massive decline in share exchanges was counterbalanced by transactions with fixed income instruments, the value of which amounted to 11.1 billion lei, an increase of 70%, thanks to several issues of Fidelis government bonds.

BVB's operational expenses in the first nine months of the year were 21.4 million lei, up by 15%, against the background of inflation that generated increases in personnel expenses, prices of services and purchased assets, necessary for the optimal performance of authorized activities and for the promotion of the capital market, according to BVB reporting.

In this context, BVB achieved an operating profit of 8.64 million lei, in the first three quarters of the year, to which was added a gain from financial activities of 3.91 million lei, 45% above that of the same period of the year 2023.

The revenues of the post-transaction segment achieved by Depozitarul Central increased by 18% to the value of 27.5 million lei, mainly as a result of the increase in the value of the portfolios managed by the custodian agencies, especially due to the listing of Hidroeletrica, the increase in tariffs starting from February 1 2024, in particular of the maintenance fee for issuers, as well as as a result of carrying out one-off operations.The net profit of the Central Depository amounted to almost 8.2 million lei, up 17% compared to the first nine months of last year.

CCP.RO Bucharest, the entity intended to function as a central counterparty, is in the process of authorization and operationalization, so it did not achieve operational income in the first nine months of the year. Operating expenses increased by 34%, up to the value of 7.24 million lei, influenced by new expenses incurred in the authorization and implementation process with an impact on personnel expenses (increase in the number of employees) and third-party services (management services of the compensation, risk model audit and IT), as well as other higher operational expenses, on the basis of the relocation of the headquarters at Group level, with an impact on the depreciation expenses of fixed assets and assets with right of use, according to BVB.

In the first nine months of the year, CCP.RO Bucharest recorded a net loss of six million lei. "The effective launch of the operations depends on the completion of the authorization process by the ASF according to the EMIR rules", the report states.

For the third quarter, BVB's net profit amounted to 2.12 million lei, down 83% compared to the third quarter of last year, when the revenues from the Hidroelectrica listing were reflected in the financial statements of our market operator.

BVB's shareholders include former SIFs, Pillar II pension funds, investment funds, brokerage companies, the Romanian Commodity Exchange and natural persons.