BME net profit for the first nine months of 2016 totaled €121 million, a decrease of 8.6% on the year ago figure. Third quarter net profit decreased 14.3%, to €35.1 million. The general slowdown in market volumes in the Equities and Derivatives units was partially offset by the positive performance by other units and products thanks to the diversification of the Company’s business model.
Revenues in the quarter were 10.4% lower than the third quarter of 2015, at €74.6 million. Accumulated revenues in the first nine months of the year were €242.9 million, 8.2% down on 2015.
Operating costs in the third quarter decreased by 3.2% and by 1.7% in the first nine months of the year, excluding the effects of non-recurrent items and the integration of Infobolsa. Without stripping out non-recurrent ítems, operating costs in the third quarter increased by 3% compared with the same quarter last year, while in the first nine months of the year they were 2.7% higher than the same period in 2015.
Following recognition of operating costs, EBITDA in the third quarter stood at €48 million, 17% lower than in 2015, whilst EBITDA in the first nine months of the year fell 13.4%, to €161.6 million. Excluding the effects of non-recurrent items and the integration of Infobolsa group, EBITDA in the first nine months of the year fell by 13.2% on the same period in 2015, and 16.6% in the third quarter.
Accumulated earnings per share at the end of the third quarter stood at €1.45 per share, of which €0.42 corresponds to the third quarter.
BME’s coverage of its cost base with revenues not linked to volumes stood at 121% at the end of the first nine months of the year, three points higher than in the previous year.
The ROE and efficiency financial monitoring ratios stood at 37.3% and 32.9%, respectively, for the first nine months of the year, compared to 41.1% and 29.2% in the same period in 2015.
The net revenues of the Equity business unit in the first nine months of 2016 totaled €105.1 million and €31.8 million in the third quarter, down 13.1% and 13.6% year-on-year, respectively.
Stripping out operating costs, the unit’s EBITDA stood at €22.1 million in the third quarter, and €75.6 million for the first nine months of the year, 19.2% and 18.3% down on 2015, respectively.
The investment flows channeled through the Exchange were up 6.4% on the same period in 2015, at €6.5 billion. Of this, €1.8 billion related to new shares and €4.7 billion to shares that were already listed.
The Reform of the Clearing and Settlement System in Spain has been completed successfully, with the settlement cycle for equity instruments being cut from three days to two days following the trade date.
A total of 2.5 million trades were settled in the third quarter of the year. In the first nine months of the year, 20.5 million trades were settled. The netting carried out by the clearing house, as a result of the launch of the new system, has led to a significant reduction in the number of trades settled, counterweighed through the introduction of clearing of equity trades in BME Clearing.
The combination of revenues from settlement, registration and other activities resulted in total net revenues for the unit of €15.3 million in the third quarter and €52.2 million in the first nine months of the year, falls of 18.4% and 14.9%, respectively. EBITDA for the third quarter reached €11.4 million and it totaled €40.3 million in the first nine months of the year.
Between the launch of equity clearing activity and the end of September, 44 million trades, totaling €490 billion were cleared. In the third quarter, 22.6 million trades were processed, totaling €237.5 billion.
Clearing of the underlying instruments managed by BME Clearing generated net revenues in the third quarter of the year of €6.4 million, 42.3% up on the same period in 2015. This brought total net revenue in the year to September to €17 million, an increase of 25.6% over 2015.
EBITDA increased by 103.2% year-on-year in the third quarter, to €4.2 million, taking EBITDA in the first nine months of the year to €10.1 million, 65.5% higher than in the same period in 2015.
The Information unit continued to expand the range of information services and content it offers in the third quarter of the year, whilst the upward trend in the customer base and direct connections to BME Market Data’s information servers since the start of the year continued.
At the end of September, the total number of connected clients was up 2.9% on the same date in 2015, whilst the number of clients with direct connections to BME’s information servers was at record levels, up 6.1% in the year.
Net revenue in the third quarter rose 18.1% compared to 2015, to €11.2 million. In the first nine months of the year, the unit’s net revenue was €33.6 million, 19.2% up on the same period in 2015. EBITDA increased, up 2% in the year-to-date to €26.2 million, while the third quarter went down 1.9% to €8.5 million.
Trading conditions for financial Derivatives in the third quarter of the year saw low volatility and thin volumes in European markets, Spain was no exception to this. This low volatility resulted in volumes being lower than in 2015.
Net revenues in the third quarter stood at €2.5 million, down 17.1% on the same period in 2015. Net revenues to the end of September were €8.2 million, 11.4% lower year-on-year. EBITDA was down by 34.4% in the quarter and 25.4% in the first nine months of the year.
Trading of Fixed Income products continues to be challenging in the current climate of low interest rates in European monetary policy.
Meanwhile, the Alternative Fixed Income Market (MARF) continued to grow. Admissions to trading in the year to September amounted to €1.5 billion (+155%), with €1.6 billion outstanding balance at the end of the period, 80% higher than the same date in 2015.
The combination of trading and listing activity in the unit generated net revenues of €1.9 million in the third quarter, down 16% on 2015. Net listing revenues fell by 1.8% between January and September, whilst trading revenues were down by 9.2%, at €3 and €3.9 million, respectively.
IT & CONSULTING
The IT and Consulting unit made positive progress in its technological infrastructure services, regulatory compliance, market access and financial communication in the first nine months of the year.
Progress was made in the area of technological infrastructure through the marketing of contingency and Cloud services to companies and the outsourcing of services to Innova.
In terms of market access and interface services, migration of the London hub servers to the new Equinix server has resulted in a 44.8% increase in the number of entities connected through this channel. The number of entities using co-location has also increased.
The unit’s revenue for the third quarter reached €4.4 million while in the first nine months it totaled €13.9 million, up 2.6% and 5% respectively. EBITDA for the third quarter amounted to €1.6 million, whilst accumulated EBITDA to the end of September totalled €5.3 million.