Moscow Exchange announces results for the first quarter of 2021
Moscow Exchange (MOEX) today announces its financial results in accordance with International Financial Reporting Standards (IFRS) for Q1 2021. Record fee income from the Equities and Derivatives Markets as well as strong performance by the Money Market and Depository & Settlement Services helped MOEX sustain double-digit F&C income growth.
Unless stated otherwise, all figures below refer to performance in Q1 2021 and all comparisons are with the corresponding period last year.
KEY FINANCIAL HIGHLIGHTS FOR Q1 2021
- Fee and commission (F&C) income expanded by 17.0% to RUB 9,252.9 mln.
- Operating income was up 7.2%; F&C income accounted for more than 70% of operating income for the third consecutive quarter.
- EBITDA added 13.9% and the EBITDA margin improved to 73.0%. The adjusted EBITDA margin was 71.7%.
- Net profit grew 15.8% to reach RUB 6,835.3 mln. Adjusted net profit was up 1.6%.
KEY BUSINESS & CORPORATE HIGHLIGHTS FOR Q1 2021
- FX, Derivatives and Precious Metals Markets are now open for nearly 17 hours a day following the launch of the morning trading session. This session expands availability of exchange services for clients from Eastern regions of Russia as well as Asian countries.
- Fix Price Group, a Russian variety value retailer, listed its GDRs on MOEX following the company’s successful IPO, which was the largest offering by a private-sector Russian company in a decade.
- The Bond Market welcomed 119 new bond issues by 53 corporates, including 14 newcomers, for a total of RUB 448 bln.
- ETFs continue to gain ground with more than 20 listed during the quarter and up to date. The total number of ETFs traded on MOEX reached 79 with a total NAV of approximately RUB 190 bln.
- MOEX began calculating seven new indices: three in equities (two featuring the IT and Construction sectors, respectively, and one sustainability-themed), three in commodities (on wheat, barley and corn) and one in bonds (on high-yield increased investment risk bonds).
EVENTS OCCURRING AFTER THE REPORTING PERIOD
- The number of individuals with brokerage accounts stood at 11.5 mln as of April 28. The number of Individual Investment Accounts now exceeds 3.9 mln.
- 18 international stocks were admitted to trading on MOEX with an additional 19 to start trading at the beginning of May. This will bring the total number of international stocks available for trading on MOEX to 124.
- Segezha Group, a Russian forestry products company, raised RUB 30 bln in an IPO on MOEX.
- Deliverable Ozon futures contracts as well as mini futures on Transneft preferred shares began trading on MOEX. The options product range was expanded by the introduction of futures-style options on securities of Sistema, Inter RAO UES, Polymetal, Tinkoff, X5 Retail Group, Mail.ru Group, and Ozon.
- Micro-lots featuring one dollar/euro minimum order sizes were introduced on the FX Market, making currency trading more accessible and convenient for retail clients.
- Eurobonds of foreign companies commenced trading on MOEX, with Rolls-Royce Eurobonds being the first such instrument to be admitted to trading on MOEX, with a lot size of USD 1,000.
Yury Denisov, Chief Executive Officer of Moscow Exchange, said:
"Moscow Exchange had a successful start to the year: trading volumes grew across most markets and we delivered strong financial results. The Exchange continues to actively develop its product line and expand opportunities for all types of investors. The launch of the morning session on the FX and Derivatives Markets had a positive impact on volumes and significantly improved access to our platform for investors in the eastern parts of Russia as well as participants in Asia. We continue to roll out new products targeted at retail investors, including adding more ETFs, small-lot Eurobonds as well as Russian and international stocks. We have now made it possible to trade currencies with an order size of just one USD or one EUR. We see strong interest in new stock placements on Moscow Exchange. Notably, Segezha Group recently debuted, raising RUB 30 billion on our market. In the quarters ahead we expect to see stronger activity on the Bond Market; the market is gradually adapting to the higher interest rate environment. We continue to deliver on our strategic initiatives and we are optimistic about the growth of our business this year."
Max Lapin, Chief Financial Officer of Moscow Exchange, said:
"We maintained a double-digit F&C growth this quarter at the level of 17%, in line with the strategic target, despite the elevated base of last year. The first quarter of 2020 featured extraordinary volatility, whereas the backdrop of the first quarter of this year was rather tepid. Nevertheless, market activity was strong as we witnessed F&C income from the Equities and Derivatives Markets post new records. Equities Market velocity during the quarter was almost at the level of 1Q 2020, supported by retail investor activity. Continued demand for repo operations drove a very solid performance of the Money Market as well as Depository and Settlement Services. Both business lines approached the 40% growth rate. The latter also feeds off a surge in the value of assets held in custody.
"Operating income added 7.2% despite an 11.1% contraction in Net interest income (NII) on the back of lower domestic and global interest rates. The Company is positively geared up to the rises in interest rates, both RUB and USD. The share of F&C income remained comfortably above the strategic target of 70% for the third consecutive quarter. This means that our financial performance is driven predominantly by F&C income.
"The same logic applies to OPEX, which added 23% during the quarter. First, it didn’t break the positive trend established by F&C. Second, it has to be adjusted for the release of substantial bonus provisions in the base year. Net of this effect, OPEX growth settles at 18%. It means we maintained virtually neutral fee-level operating jaws on a comparable basis for the quarter. Another important factor is headcount growth linked to a family of development projects that we outlined during the full year 2020 earnings call. Therefore, we keep the full year 2021 OPEX guidance unchanged and expect OPEX growth to moderate in 2H 2021.
"Net profit for the quarter increased 15.8% to RUB 6.8 bln. Excluding the effect of Expected Credit Loss (ECL) provisions, the adjusted net profit added 1.6%."
FINANCIAL HIGHLIGHTS
| RUB mln | Q1 2021 | Q1 2020 | YoY | Q4 2020 | QoQ |
|---|---|---|---|---|---|
| Operating income | 12,856.4 | 11,988.4 | 7.2% | 13,266.8 | -3.1% |
|
9,252.9 | 7,909.9 | 17.0% | 10,046.5 | -7.9% |
|
3,550.6 | 3,992.7 | -11.1% | 3,168.9 | 12.0% |
| NII less realized gains on investment portfolio revaluation (core NII)[1] | 2,921.3 | 3,290.9 | -11.2% | 3,193.4 | -8.5% |
|
52.9 | 85.8 | -38.3% | 51.4 | 2.9% |
| Operating expenses | 4,524.0 | 3,678.2 | 23.0% | 4,710.8 | -4.0% |
|
2,394.0 | 1,794.7 | 33.4% | 2,389.2 | 0.2% |
|
1,315.0 | 1,169.1 | 12.5% | 1,347.8 | -2.4% |
|
815.0 | 714.4 | 14.1% | 973.8 | -16.3% |
| Profit before other operating expenses and tax | 8,332.4 | 8,310.2 | 0.3% | 8,556.0 | -2.6% |
| Other operating gains/(expenses) | 158.5 | -871.0 | nm | 321.5 | nm |
| Net profit | 6,835.3 | 5,904.0 | 15.8% | 6,847.8 | -0.2% |
| Basic earnings per share, RUB | 3.03 | 2.62 | 15.6% | 3.04 | -0.3% |
| Net Profit | 6,835.3 | 5,904.0 | 15.8% | 6,847.8 | -0.2% |
|
-158.5 | 871.0 | nm | -321.5 | nm |
|
31.7 | -174.2 | nm | 64.3 | nm |
| Adjusted net profit | 6,708.5 | 6,600.8 | 1.6% | 6,590.6 | 1.8% |
| EBITDA | 9,382.2 | 8,234.9 | 13.9% | 9,756.7 | -3.8% |
|
-158.5 | 871.0 | nm | -321.5 | nm |
| Adjusted EBITDA | 9,223.7 | 9,105.9 | 1.3% | 9,435.2 | -2.2% |
| Adjusted EBITDA margin | 71.7% | 76.0% | -4.3 p.p. | 71.1% | 0.6 p.p. |
PERFORMANCE OF KEY BUSINESS LINES
| RUB mln | Q1 2021 | Q1 2020 | YoY | Q4 2020 | QoQ |
|---|---|---|---|---|---|
| Equities Market | |||||
| Fee and commission income, RUB mln | 1,257.1 | 1,117.2 | 12.5% | 1,178.6 | 6.7% |
| Trading volumes, RUB bln | 7,154.7 | 6,263.3 | 14.2% | 6,700.9 | 6.8% |
| Bond Market | |||||
| Fee and commission income, RUB mln | 516.9 | 655.1 | -21.1% | 989.0 | -47.7% |
| Trading volumes (excl. overnight bonds), RUB bln | 4,034.2 | 6,278.7 | -35.7% | 7,899.2 | -48.9% |
| FX Market | |||||
| Fee and commission income, RUB mln | 1,073.3 | 1,070.4 | 0.3% | 1,142.6 | -6.1% |
| Trading volumes, RUB bln | 78,726.8 | 80,851.4 | -2.6% | 88,492.6 | -11.0% |
| Money Market | |||||
| Fee and commission income, RUB mln | 2,388.2 | 1,722.2 | 38.7% | 2,578.5 | -7.4% |
| Trading volumes, RUB bln | 93,608.8 | 95,185.8 | -1.7% | 117,135.8 | -20.1% |
| Derivatives Market | |||||
| Fee and commission income, RUB mln | 1,228.2 | 1,099.1 | 11.7% | 1,097.0 | 12.0% |
| Trading volumes, RUB bln | 40,069.2 | 33,561.6 | 19.4% | 37,190.7 | 7.7% |
| Depository and Settlement Services | |||||
| Fee and commission income, RUB mln | 1,921.3 | 1,393.6 | 37.9% | 2,023.5 | -5.1% |
| Average assets under custody, RUB bln | 63,147.5 | 51,281.8 | 23.1% | 58,802.7 | 7.4% |
| Other fee and commission income (IT Services, Listing and Other fee income) | 867.9 | 852.3 | 1.8% | 1,037.3 | -16.3% |
| Information services, RUB mln | 274.0 | 291.2 | -5.9% | 272.6 | 0.5% |
| Sale of software and tech. services, RUB mln | 246.7 | 210.9 | 17.0% | 287.8 | -14.3% |
| Listing and other services, RUB mln | 155.9 | 136.7 | 14.0% | 269.3 | -42.1% |
| Other fee income, RUB mln | 191.3 | 213.5 | -10.4% | 207.6 | -7.9% |
| Net interest and other finance income | |||||
| Net interest and other finance income, RUB mln | 3,550.6 | 3,992.7 | -11.1% | 3,168.9 | 12.0% |
| Investment portfolio, RUB bln | 928.7 | 756.0 | 22.8% | 924.9 | 0.4% |
- The total market capitalization of the Equities Market at the end of the first quarter was RUB 56.42 trln (USD 745.74 bln). Fee and commission income from the Equities Market grew by 12.5% on the back of the corresponding increase in trading volumes of 14.2%. The minor discrepancy in fee income and trading volumes dynamics is due to the tariff structure that provides monetary incentives for higher volumes traded.
- Fees and commissions from the Bond Market decreased by 21.1%. Trading volumes excluding overnight bonds shrank by 35.7%. The effective fee in the Bond Market improved due to adjustments in tariff schedules across trading modes.
- Money Market fee income advanced 38.7% to reach nearly RUB 2.4 bln. Trading volumes were down 1.7%. The discrepancy between volume and fee dynamics was attributable to an increase in average repo terms, a higher GCC repo share that was supported by strong demand for such instruments.
- Fee income from the FX Market was virtually flat, adding just 0.3%. Trading volumes decreased by just 2.6%. The trading volume mix continued to shift towards the more profitable spot segment. Spot volumes added 5.6%, while swap volumes declined by 6.2%.
- Derivatives Market fee income grew 11.7%, while trading volumes expanded 19.4% on the back of FX derivatives volumes rising by 39.5%. The discrepancy between fee income and volumes dynamics is the result of a shift in the structure of trading volumes and a lower share of options. Index derivatives trading volumes increased by 14.6%. Commodity derivatives trading volumes declined by 5.9%. Single stock derivatives trading volumes improved by 5.1%.
- The Other fee income line includes an additional fee on EUR balances of 0.2% above the ECB rate that was introduced at the beginning of 2020. The decrease of 10.4% in this line is explained by the high base effect. The sale of software and technical services line added 17.0% YoY.
- The cash position[2] at the end of Q1 2021 was RUB 102.54 bln. The company had no debt as of the end of the quarter.
- Capex for the quarter was RUB 0.52 bln, mostly spent on purchases and development of software as well as furniture & equipment.
Moscow Exchange’s consolidated IFRS financial statements for Q1 2021 are available in the Investor Relations section of the company's web site.
The Q1 2021 IFRS Financial Results webcast is scheduled for 30 April 2021 at 4:00 pm (Moscow time).
Contacts:
Investor Relations: Public Relations:
| Anton Terentiev, CFA +7 495 363 3232 ir@moex.com |
Lev Bystrov +7 495 363 3232 pr@moex.com |
NOTES TO EDITORS
About Moscow Exchange
Moscow Exchange Group operates Russia’s main trading platform for equities, bonds, derivative instruments, currencies, money market instruments and commodities. The Group includes the central securities depository (National Settlement Depository), and a clearing center (National Clearing Centre), performing the functions of central counterparty on the markets, which allows Moscow Exchange to offer its clients the full spectrum of trading and post-trading services. Moscow Exchange held the initial public offering of its shares on 15 February 2013 (ticker MOEX).
Disclaimers
Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in the Russian Federation, rapid technological and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations.