THE MANAGEMENT OF VICTOR CIONGA Profit down 45% for the BSE

The Bucharest Stock Exchange (BSE) posted a net profit of 1.53 million lei in the first quarter of this year, down 45% over Q1 2012.

The operating profit for Q1 2013 reached 0.66 million lei, down 66% compared to the similar period of 2012, amid a drop in the trading commissions.

The financial profit for the January-March 2013 period was 1.13 million lei, over seven times greater compared to Q4 2012, when the evolution of the exchange rate for the leu had led to foreign exchange losses, whereas interest revenues had remained steady.

The BSE ended the first quarter of 2013 with a turnover of 4.06 million lei, down 19% YOY, as the January-March 2012 was the best period of the last five years for the regulated market, as it saw the secondary public offer of 15% of the capital of Transelectrica.

After the first three months of 2013, operating expenses increased over 10% YOY, mostly on the back of staff expenses.

According to the quoted press release, on March 31st, 2013, the total assets of the BSE amounted to 1 billion lei, up 2% over the end of 2012.

The increase in trading activity in March led to a 54% increase in commercial receivables and of 26% of other receivables, at the end of the first quarter, compared to the beginning of the year, the press release states.

The debts of the BSE at the end of Q1 2013 amounted to 2.95 million lei, up 22% over December 31st, 2012, according to the document. According to the press release: "The increase was caused by the fiscal debts to the state budget and the social security budget, as well as the trade debts pertaining to the ongoing projects".

Between September 2012 and March 2013 the BSE was led by Victor Cionga, selected by the head-hunter Radu Furnică after an elaborate recruitment process.

At the end of March, one night, Victor Cionga was dismissed by the Council of the Board of Directors claiming that he wasn't quick enough in restructuring the company. In the market, however, there has been criticism directed at Cionga due to the contracts that he had the BSE sign with his personal advisors, as well as due to other expenses which some consider unjustified.

• The initial public offer for the sale of 10% of Nuclearelectrica, scheduled for Q2 2013

According to the statements and the commitments of the Government made to the IMF, the sale of a stake of 10% of the shares of Nuclearelectrica, is scheduled to take place in Q2 this year.

According to the press release of the BSE, if the offer will take place by the agreed deadlines, this could reconfirm the schedule of listings assumed by the Government and could bring investors back into the market.

"The positive effect of these public offers could also lead to an increase in operating revenues and the profitability of the BSE, in line with the budgeted levels", the aforementioned press release states.

This year, the Romanian government is scheduled to bring to the stock market the stocks of other important companies, such as Romgaz, Electrica and "Complexul Oltenia".