Solid Financial Results of the GPW Group for Q1 2022 and High Dividend for Shareholders

  • May 31, 2022
Solid Financial Results of the GPW Group for Q1 2022 and High Dividend for Shareholders

PRESS RELEASE

  • GPW Group’s revenue at PLN 110.2 million in Q1 2022 (-1.2% YoY)
  • EBITDA at PLN 50.7 million (-5.8% YoY)
  • Operating profit at PLN 40.9 million (-9.2% YoY)
  • Net profit at PLN 38.1 million (-2.1% YoY)
  • Recommendation of dividend payment from 2021 profit of PLN 115.0 million (PLN 2.74 per share)
  • Commenced conceptual work on the GPW Group’s new development strategy for 2023-2027

The Warsaw Stock Exchange Group (GPW Group) generated PLN 110.2 million of sales revenue in Q1 2022. Revenue decreased by 1.2% year on year and increased by 2.5% quarter on quarter. The year-on-year decrease in revenue was driven by an increase of trading revenue on the financial market by PLN 0.5 million i.e. 1.0%, while trading revenue on the commodity market decreased by PLN 0.9 million i.e. 5.0%. EBITDA was PLN 50.7 million, operating profit PLN 40.9 million, and net profit PLN 38.1 million in Q1 2022. In Q1 2022, the GPW Group worked on reviewing the impact of the #GPW2022 development strategy and commenced conceptual work on the new strategy covering the period 2023-2027.

“Q1 2022 brought increased volatility on the markets, including the Polish capital market, driven by the outbreak of war in Ukraine. The volatility caused by this most adverse event resulted in higher volumes and value of turnover on the GPW financial market,” said Marek Dietl, President of the GPW Management Board.

The GPW Supervisory Board approved the recommendation of the GPW Management Board concerning the payment of a dividend for 2021 in the amount of PLN 115.0 million, equal to PLN 2.74 per share and representing 71.3% of the consolidated net profit (84.0% of the net profit attributable to the shareholders of the parent company adjusted for the share of profits of associates). The dividend payment will be decided at GPW’s Annual General Meeting, which has been convened for 23 June 2022.

“Due to very good results of the GPW Group in 2021, the end of the time horizon of the Strategy #GPW2022 and partial financing of ongoing strategic projects from external funds (NCBiR), we have recommended a dividend payment to our shareholders at PLN 2.74 per share, i.e., PLN 0.14 more than the dividend announced and provided for in our dividend policy,” said Mr Dietl.

Presentation of the financial results of the GPW Group for Q1 2022
Net profit

The net profit of the GPW Group was PLN 38.1 million in Q1 2022, representing a decrease of 2.1% year on year and a decrease of 8.0% quarter on quarter. The year-on-year decrease of the net profit was driven by an increase of revenue on the financial market by PLN 0.8 million combined with a decrease of revenue on the commodity market by PLN 1.9 million and an increase of operating expenses by 4.6% YoY. The year-on-year decrease of the net profit was also driven by a 15.0% decrease of the share of profit of entities measured by the equity method (mainly KDPW).

Revenue from the financial market

The sales revenue from the financial market stood at PLN 73.7 million in Q1 2022, an increase of 1.1% year on year and 11.1% quarter ion quarter. The revenue from the financial market contributed 66.9% of the total sales revenue of the GPW Group in Q1 2022 vs. 65.4% in Q1 2021 and 61.7% in Q4 2021. The revenue from the financial market includes trading revenue, listing revenue, and revenue from information services.

✔ Trading revenue on the financial market

The trading revenue on the financial market stood at PLN 53.7 million in Q1 2022 vs. PLN 53.2 million in Q1 2021 and PLN 47.4 million in Q4 2021, representing an increase of 1.0% year on year and 13.3% quarter on quarter. The revenue was mainly driven by revenue from trading in equities and equity-related instruments at PLN 42.3 million, which decreased by 5.2% YoY and increased by 13.6% QoQ. The Electronic Order Book turnover on the Main Market in Q1 2022 increased by 5.0% year on year to PLN 98.4 billion. Despite the year-on-year increase in equities turnover, the revenue decreased due to a decrease of the average fee on the equity market from 2.23 bps in Q1 2021 to 2.11 bps in Q1 2022.

In Q1 2022, revenue from trading in derivatives increased by 40.1% year on year and by 45.7% quarter on quarter. Revenue growth in this business line can be attributed to the high volatility of the WIG20 index, which stood at 36.5% in Q1 2022 vs. 22.7% in Q1 2021. The volume of trading in WIG20 futures increased by 49.4% year on year and by 61.1% quarter on quarter.

✔ Listing revenue

The GPW Group’s listing revenue on the financial market was PLN 6.3 million in Q1 2022 vs. PLN 6.5 million in Q1 2021 and PLN 4.3 million in Q4 2021. Revenue from listing fees stood at PLN 5.3 million (+14.5% YoY and +24.4% QoQ). The total value of IPOs on the Main Market and NewConnect stood at PLN 20 million in Q1 2022 vs. PLN 1,775 million in Q1 2021. The total value of SPOs stood at PLN 210 million vs. PLN 278 million in Q1 2021.

✔ Information services

The revenue from information services stood at PLN 13.7 million in Q1 2022 representing an increase of 3.0% year on year and a decrease of 6.2% quarter on quarter. The revenue accounted for 12.4% of the GPW Group’s total sales revenues

Revenue from the commodity market
Revenue from the commodity market

The sales revenue on the commodity market was PLN 35.9 million in Q1 2022, a decrease of 5.1% year on year and a decrease of 10.4% quarter on quarter. It contributed 32.5% of the Group’s total revenues in Q1 2022. The revenue from the commodity market includes trading revenue, revenue from operation of the register of certificates of origin, and revenue from clearing.

✔ Trading revenue on the commodity market

The trading revenue on the commodity market stood at PLN 16.9 million in Q1 2022, representing a decrease of 5.0% year on year and 16.5% quarter on quarter.

The revenue from trade in electricity was PLN 3.8 million in Q1 2022, an decrease of 3.2% year on year and 28.8% quarter on quarter. The total electricity turnover on the market operated by TGE was 42.0 TWh in Q1 2022 (-11.9% YoY; -32.0% QoQ). The decrease of the revenue was mainly caused by a decrease of turnover volumes on the forward market (lower turnover in annual instruments).

The revenue from trade in gas increased by 9.2% year on year and decreased by 5.8% quarter on quarter and stood at PLN 3.4 million. The total turnover in natural gas was 42.4 TWh (+16.0% YoY; -2.0% QoQ).

The revenue from trade in property rights to certificates of origin stood at PLN 5.3 million in Q1 2022, representing a decrease of 23.3% year on year and 21.1% quarter on quarter. The turnover volume was 5.7 TWh (-21.6% YoY). The lower volume of trading in property rights was driven by uncertainty about the future cancellations of certificates and a lower volume of trading in energy efficiency rights resulting from a lower number of certificates of origin issued.

The Group’s revenue from other fees paid by commodity market participants stood at PLN 4.3 million in Q1 2022, an increase of 16.0% year on year and a decrease of 2.8% quarter on quarter. The revenue included fees paid by TGE market participants at PLN 2.7 million, revenue of InfoEngine’s activity as trade operator at PLN 0.6 million, and revenue of Izba Rozliczeniowa Giełd Towarowych at PLN 1.0 million in Q1 2022.

✔ Operation of the Register of Certificates of Origin

The revenue from the operation of the Register of Certificates of Origin was PLN 6.3 million in Q1 2022, representing a decrease of 8.2% year on year and an increase of 12.0% quarter on quarter. The decrease of the revenue from the operation of the Register year on year was driven mainly by a decrease in revenues from the register of RES certificates of origin. The main drivers of the decrease included the lack of cancellations in February and March 2022, a year-on-year decrease in issuances in all months of 2022, and a decrease in the turnover of certificates (turnover impacts the revenue from fees for an increase of the account balance).

✔ Clearing

The revenue from clearing was PLN 12.4 million in Q1 2022 (-4.2% YoY; -10.6% QoQ). The revenue from the clearing of transactions on the electricity market amounted to PLN 3.1 million, transactions on the gas market PLN 7.2 million, and transactions in property rights PLN 2.1 million.

✔ information services

Revenue from information services on the commodity market stood at PLN 302 thousand in Q1 2022 vs. PLN 260 thousand in Q1 2021.

Operating expenses

Operating expenses stood at PLN 68.8 million in Q1 2022, representing an increase of 4.6% year on year and an increase of 9.0% quarter on quarter.

The GPW Group’s provisions against capital market supervision fees stood at PLN 14.6 million in Q1 2022, a year-on-year increase compared to PLN 14.2 million in Q1 2021. The amount recognised in the first quarter of each financial year represents an annual fee, which is not distributed evenly over time. The Group cannot control the amount of PFSA fees. The actual amount of the supervision fee for 2022 will be published by PFSA in Q3 2022.

The Group’s salaries and other employee costs stood at PLN 27.6 million and were stable year on year (+2.8% YoY), driven among others by an increase of costs in IRGiT by PLN 0.3 million and GPW Benchmark by PLN 0.2 million.

Maintenance fees stood at PLN 1.2 million, stable year on year. Maintenance fees included mainly maintenance fees at the Centrum Giełdowe building.

Depreciation and amortisation charges in Q1 2022 stood at PLN 9.8 million (+11.5% YoY; +6.8% QoQ), including depreciation of property, plant and equipment at PLN 3.2 million, amortisation of intangible assets at PLN 5.3 million, and depreciation charges related to leases at PLN 1.4 million. The increase in depreciation charges was mainly the result of a reduction in the depreciation period of the UTP trading system due to the implementation of WATS.

External service charges in Q1 2022 stood at PLN 13.9 million (+5.3% YoY and -20.9% QoQ). The year-on-year increase was driven by an increase of the cost of international energy market services by PLN 0.4 million combined with an increase in advisory costs by PLN 0.4 million (due to a higher cost of GPW’s advisory services in connection with ongoing projects, tax and process management advisory in the commodity companies segment), as well as an increase in the costs of promotion, education, and market development by PLN 0.7 million (cost of events accompanying GPW’s 30th anniversary).

Share of profit of entities measured by the equity method

The Group’s share of profit of entities measured by the equity method stood at PLN 4.6 million in Q1 2022 (-15.0% YoY; -12.8% QoQ). The lower share of profit of entities measured by equity method was mainly driven by lower profits of the KDPW Group year on year.