22.05.2023 09:45
Moscow Exchange announces results for the first quarter of 2023
Moscow Exchange (MOEX) today announces its financial results based on summary financial statements prepared in accordance with International Financial Reporting Standards (IFRS) for Q1 2023.
Unless stated otherwise, all figures below refer to performance in Q1 2023 and all comparisons are with the corresponding period last year.
KEY FINANCIAL HIGHLIGHTS FOR Q1 2023
- Fee and commission (F&C) income decreased by 6.5% and amounted to RUB 9.96 bln.
- Net interest income (NII) grew 21.0%. Core NII improved 20.4%.
- Operating income was up 6.9%.
- OPEX declined by 17.9%. Cost-to-income ratio decreased by 7 p.p. and amounted to 23.4%.
- Adjusted net profit added 17.4% to reach RUB 14.30 bln.
KEY BUSINESS & CORPORATE HIGHLIGHTS FOR Q1 2023
- 5 new cash-settled futures contracts on 6 RUB FX pairs (TRY-RUB, HKD-RUB, AED-RUB, INR-RUB, KZT-RUB, AMD-RUB) and on iShares Core Nikkei 225 ETF (trade code – NIKK) were introduced on the Derivatives market.
- The Bond Market welcomed 133 new bond issues by 74 corporates, including 15 newcomers, for a total of RUB 924 bln.
- On the Derivatives Market, options trading fee was decreased 5 times to ramp up the attractiveness and convenience of options’ trading for all categories of customers.
- Group chats operating via secure communication channels at MOEX Trade SE terminal are now available for market participants. The group chat functionality is being launched in pilot mode and will be available in the MOEX Trade SE and MOEX Dealing terminals for free during the trial run.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
- Genetico (GECO), a medical services provider, completed its IPO on MOEX, raising RUB 179 mln. The order book was oversubscribed 2.5 times, with total demand exceeding RUB 439 mln.
- 25 million people held brokerage accounts on MOEX at the end of April. Over 2 million new unique accounts have been registered since the beginning of the year.
- MOEX acquired a 50.1% stake in ProCompliance, a leading developer of software for automating compliance services on the financial market. Within three years, the ownership share can be increased to 100%.
- MOEX introduced a new CCP-based segment for OTC trading in non-listed equities. It can potentially become a pre-IPO platform.
- Deliverable futures and cash-settled options on Human Stem Cell Institute shares (ISKJ) were introduced on the Derivatives Market.
FINANCIAL HIGHLIGHTS
| RUB mln | Q1 2023 | Q1 2022 | YoY | Q4 2022 | QoQ |
|---|---|---|---|---|---|
| Operating Income | 23,211.1 | 21,721.1 | 6.9% | n/a | n/a |
| · Fee and commission income | 9,960.0 | 10,647.8 | -6.5% | 9,855.2 | 1.1% |
| · Net interest and other finance income (NII) [1] | 13,185.1 | 10,899.7 | 21.0% | n/a | n/a |
| Core NII – NII less realized gains or losses on investment portfolio revaluation [2] | 13,176.7 | 10,945.2 | 20.4% | n/a | n/a |
| · Other operating income | 66.0 | 173.6 | -62.0% | n/a | n/a |
| Operating Expenses | 5,423.5 | 6,602.9 | -17.9% | 6,046.1 | -10.3% |
| · Personnel expenses | 2,712.1 | 3,067.0 | -11.6% | 3,147.1 | -13.8% |
| · D&A and IT maintenance | 1,570.1 | 1,597.4 | -1.7% | 1,482.4 | 5.9% |
| · Remaining general and administrative expenses | 1,141.3 | 1,938.5 | -41.1% | 1,416.6 | -19.4% |
| Profit before other operating expenses and tax | 17,787.6 | 15,118.2 | 17.7% | n/a | n/a |
| Movement in allowance for expected credit losses | 46.1 | - 5,103.3 | nm | n/a | n/a |
| Other impairment and provisions | - 0.8 | - | nm | n/a | n/a |
| Profit before tax | 17,832.9 | 10,014.9 | 78.1% | 14,195.1 | 25.6% |
| Income tax | - 3,498.4 | - 1,915.5 | 82.6% | - 3,003.7 | 16.5% |
| Net Profit | 14,334.5 | 8,099.4 | 77.0% | 11,191.4 | 28.1% |
| Basic earnings per share, RUB | 6.35 | 3.59 | 76.9% | n/a | n/a |
| Net Profit | 14,334.5 | 8,099.4 | 77.0% | 11,191.4 | 28.1% |
| · Movements in allowance for ECLs | - 46.1 | 5,103.3 | nm | n/a | n/a |
| · Other impairment and provisions | 0.8 | - | nm | n/a | n/a |
| · Deferred taxes related to movements in allowance for ECLs and other impairment & provisions | 9.1 | - 1,020.7 | nm | n/a | n/a |
| Adjusted Net Profit | 14,298.3 | 12,182.0 | 17.4% | n/a | n/a |
| EBITDA | 19,069.7 | 11,052.7 | 72.5% | 15,330.1 | 24.4% |
| · Movements in allowance for ECLs | - 46.1 | 5,103.3 | nm | n/a | n/a |
| · Other impairment and provisions | 0.8 | - | nm | n/a | n/a |
| Adjusted EBITDA | 19,024.4 | 16,156.0 | 17.8% | n/a | n/a |
| Adjusted EBITDA margin | 82.0% | 74.4% | 7.6 p.p. | n/a | n/a |
OPEX BREAKDOWN
| RUB mln | Q1 2023 | Q1 2022 | YoY | Q4 2022 | QoQ |
|---|---|---|---|---|---|
| General and Administrative Expenses | 2,711.4 | 3,535.9 | -23.3% | 2,899.0 | -6.5% |
| · Amortisation of intangible assets | 962.8 | 752.8 | 27.9% | 846.6 | 13.7% |
| · Equipment and intangible assets maintenance | 333.3 | 559.6 | -40.4% | 347.4 | -4.1% |
| · Depreciation of property and equipment | 274.0 | 285.0 | -3.9% | 288.4 | -5.0% |
| · Professional services | 239.1 | 199.7 | 19.7% | 268.1 | -10.8% |
| · Taxes, other than income tax | 182.6 | 313.3 | -41.7% | 153.7 | 18.8% |
| · Market makers fees | 153.2 | 131.8 | 16.2% | 138.0 | 11.0% |
| · Advertising and marketing costs | 123.8 | 797.9 | -84.5% | 153.0 | -19.1% |
| · Agent fees | 115.8 | 128.5 | -9.9% | 104.9 | 10.4% |
| · Registrar and foreign depository services | 88.9 | 132.2 | -32.8% | 134.7 | -34.0% |
| · Rent and office maintenance | 88.5 | 86.1 | 2.8% | 96.9 | -8.7% |
| · Information services | 77.3 | 90.8 | -14.9% | 64.5 | 19.8% |
| · Communication services | 22.3 | 25.1 | -11.2% | 26.1 | -14.6% |
| · Charity | 11.5 | - | nm | 107.9 | -89.3% |
| · Security expenses | 7.2 | 7.5 | -4.0% | 7.3 | -1.4% |
| · Business trip expenses | 6.0 | 2.6 | 130.8% | 6.0 | 0.0% |
| · Loss on disposal of property, equipment and intangible assets | 5.7 | 2.4 | 137.5% | 109.3 | -94.8% |
| · Transport expenses | 3.9 | 4.4 | -11.4% | 5.7 | -31.6% |
| · Other | 15.5 | 16.2 | -4.3% | 40.5 | -61.7% |
| Personnel expenses | 2,712.1 | 3,067.0 | -11.6% | 3,147.1 | -13.8% |
| · Employees benefits except for share-based payments | 1,947.2 | 2,318.0 | -16.0% | 2,623.4 | -25.8% |
| · Payroll related taxes | 665.3 | 633.1 | 5.1% | 459.6 | 44.8% |
| · Share-based payment expense on equity settled instruments | 84.5 | 114.8 | -26.4% | 46.3 | 82.5% |
| · Share-based payment expense on cash settled instruments | 15.1 | 1.1 | 1,272.7% | 17.8 | -15.2% |
| Total operating expenses | 5,423.5 | 6,602.9 | -17.9% | 6,046.1 | -10.3% |
| Headcount, employees e-o-p | 2,379 | 2,381 | -0.1% | 2,339 | 1.7% |
- OPEX for 1Q’23 decreased by 17.9%, mainly due to the reduction in advertising and marketing costs.
- The 11.6% decline in personnel expenses is largely explained by an unwinding of the extra bonus provisions accumulated during FY 2022.
- Headcount measured by the number of employees barely changed, decreasing just by 0.1%.
- Advertising and marketing costs decreased 84.5% as the Finuslugi promo campaign came to a conclusion.
- Taxes, other than income tax, were down 41.7% following a reduction in taxable (VAT) marketing and IT maintenance spend.
- D&A and IT maintenance declined by 1.7%, while D&A was up 19.2%. The latter is explained by the higher CAPEX of 4Q’22. IT maintenance costs decreased 40.4% as foreign vendors discontinued their service.
- Net of marketing costs and taxes, other than income tax, G&A expenses in 1Q’23 decreased by mere 0.8%.
- Capex for the quarter was RUB 0.56 bln, mostly attributable to purchases and development of software.
- Updated FY’23 OPEX growth guidance is 10-14%.
- Updated FY’23 CAPEX guidance: RUB 4-6 bln. Actual spend will depend on the implementation of software & hardware renewal program.
PERFORMANCE OF KEY BUSINESS LINES
| RUB mln | Q1 2023 | Q1 2022 | YoY | Q4 2022 | QoQ |
|---|---|---|---|---|---|
| Equities Market | |||||
| Fee and commission income, RUB mln | 998.3 | 1,538.4 | -35.1% | 701.8 | 42.2% |
| Trading volumes, RUB bln | 3,304.1 | 9,295.0 | -64.5% | 2,656.7 | 24.4% |
| Bond Market | |||||
| Fee and commission income, RUB mln | 693.6 | 291.3 | 138.1% | 982.0 | -29.4% |
| Trading volumes (ex. overnight bonds), RUB bln | 3,969.6 | 1,991.7 | 99.3% | 6,673.3 | -40.5% |
| FX Market | |||||
| Fee and commission income, RUB mln | 1,475.0 | 1,466.3 | 0.6% | 1,508.5 | -2.2% |
| Trading volumes, RUB bln | 60,939.0 | 103,527.9 | -41.1% | 50,716.2 | 20.2% |
| Money Market | |||||
| Fee and commission income, RUB mln | 2,249.0 | 2,763.4 | -18.6% | 2,416.2 | -6.9% |
| Trading volumes, RUB bln | 186,928.6 | 192,800.6 | -3.0% | 165,830.2 | 12.7% |
| Derivatives Market | |||||
| Fee and commission income, RUB mln | 1,178.1 | 1,204.9 | -2.2% | 924.9 | 27.4% |
| Trading volumes, RUB bln | 13,771.4 | 35,534.7 | -61.2% | 11,343.7 | 21.4% |
| Depository and Settlement Services | |||||
| Fee and commission income, RUB mln | 2,157.0 | 2,148.9 | 0.4% | n/a | n/a |
| Average assets under custody, RUB bln | 61,596.7 | 67,882.5 | -9.3% | n/a | n/a |
| Other fee and commission income (IT Services, Listing, Marketplace and other) | 1,209.0 | 1,234.6 | -2.1% | n/a | n/a |
| Information services, RUB mln | 281.0 | 347.7 | -19.2% | 258.1 | 8.9% |
| Sale of software and tech. services, RUB mln | 400.1 | 288.0 | 38.9% | 361.4 | 10.7% |
| Listing and other services, RUB mln | 158.4 | 116.1 | 36.4% | 199.0 | -20.4% |
| Financial marketplace services, RUB mln | 235.6 | 186.4 | 26.4% | 217.9 | 8.1% |
| Other fee income, RUB mln | 133.9 | 296.4 | -54.8% | n/a | n/a |
| Net interest and other finance income | |||||
| Net interest and other finance income, RUB mln | 13,185.1 | 10,899.7 | 21.0% | n/a | n/a |
| Investment portfolio, RUB bln | 2,249.2 | 2,019.2 | 11.4% | n/a | n/a |
- The total market capitalization of the Equities Market at the end of the first quarter was RUB 43.44 trln (USD 556.90 bln). Fee and commission income from the Equities Market declined by 35.1%. Trading volumes contracted by 64.5% as trading velocity decelerated. The discrepancy between fee and trading volumes dynamics is explained by a new asymmetric tariff structure implemented in Nov’22.
- Fees and commissions from the Bond Market surged by nearly 2.4x. Trading volumes (excluding overnight bonds) doubled. The effective fee in the Bond Market improved due to a higher activity of corporates in the primary market and the updated tariffs that went live at the beginning of the year.
- Money Market fee income decreased by 18.6%. Trading volumes were down 3.0%. The discrepancy between volume and fee dynamics was mainly attributable to a decrease in GCC repo terms and non-CCP repo accounting for a higher share of total trading volumes.
- Fee income from the FX Market barely changed, adding just 0.6%. Trading volumes declined 41.1%. The effective fee dynamics is explained by the new tariff structure implemented in Aug’22. Also, the trading volume mix slightly improved towards a more profitable spot segment. Spot volumes decreased 32.3%. Swap volumes were down 44.9%.
- Derivatives Market fee income was down 2.2%, while trading volumes contracted by 61.2%. The effective fee dynamics are explained by a shift in the trading volume mix in favour of value-added commodity derivatives. Index and FX derivatives trading volumes declined by 87.3% and 52.4% correspondingly. Trading volumes of commodity derivatives decreased by 39.3%. The effective fee was largely driven by the introduction of an asymmetric tariff structure in Jun’22.
- Other fee and commission income declined by 2.1%. Information sales were down by 19.2% due to the two major reasons: [1] market data sales discontinuation by foreign providers and [2] ruble appreciation. Sales of software and technical services increased by 38.9%, largely due to tariffs revision and the introduction of low-latency protocols for market data distribution – SIMBA ASTS and FIFO TWIME ASTS – to Equities and FX Markets. Listing and other services increased by 36.4% as activity on the primary bond market revived. Finuslugi marketplace revenue improved by 26.4% to RUB 235.6 mln. Other fee income decreased by 54.8% as the base period revenues included additional fees on EUR balances of 0.2 p.p. above the non-positive ECB rate.
- The cash position[3] at the end of Q1 2023 was RUB 114.82 bln. The company had no debt as of the end of the quarter.
- Capex for the quarter was RUB 0.56 bln, mostly spent on purchases and development of software.
Moscow Exchange’s summary consolidated IFRS financial statements for Q1 2023 are available in the Investor Relations section of the company's web site.
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.
[1] Calculated as the sum of interest income calculated using the effective interest method, other interest income, gains/losses on FVTPL, gains/losses on FVTOCI, foreign currencies & precious metals gains less losses minus interest expense.
[2] Calculated as the sum of interest income calculated using the effective interest method, other interest income, gains/losses on FVTPL, foreign currencies & precious metals gains less losses less interest expense (compared to net interest and other finance income, excludes gains/losses on FVTOCI).
[3] Cash position is calculated as the sum of Cash and cash equivalents, Financial assets at fair value through profit and loss, Due from financial institutions, Financial assets at fair value though other comprehensive income, Current tax prepayments and Other financial assets less Balances of market participants, Overnight bank loans, Distributions payable to holders of securities, Margin account, Liabilities related to assets held for sale, Current tax payables and Other financial liabilities.