22.05.2024 09:46
Moscow Exchange announces results for the first quarter of 2024
Moscow Exchange (MOEX) today announces its financial results based on summary financial statements prepared in accordance with International Financial Reporting Standards (IFRS) for Q1 2024.
Unless stated otherwise, all figures below refer to performance in Q1 2024 and all comparisons are with the corresponding period last year.
KEY FINANCIAL HIGHLIGHTS FOR Q1 2024
- Fee and commission (F&C) income improved to RUB 14.53 bln.
- Finuslugi revenues increased to RUB 775.1 mln.
- OPEX was down 1.3% QoQ. Cost-to-income ratio amounted to 28.7%.
- Adjusted net profit was up to RUB 19.34 bln.
KEY BUSINESS & CORPORATE HIGHLIGHTS FOR Q1 2024
- Four companies from non-resource sectors did IPOs and began trading on MOEX, raising a total of RUB 22.6 billion.
- 30 new non-listed equities were added to CCP-based OTC trading mode – a pre-IPO platform – that now features a total of 58 such equities.
- The range of derivatives contracts on global benchmarks expanded with the launch of cash-settled futures on DJ Industrial Average ETF и iShares Russell 2000 ETF, broadening the diversification opportunities for end-clients. In addition, cash-settled premium options as well as deliverable futures on another two Russian equities became available on the Derivatives Market.
- Replacement bonds as well as 14 more equities are now traded after-hours, bringing the total number of instruments available for after-hours trading beyond 230. The replacement bonds segment is popular among retail investors, which account for 56% in such instruments’ trading volumes.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
- Another two companies from non-resource sectors did IPOs and began trading on MOEX, raising a total of RUB 15.0 billion. One issuer made SPO, selling RUB 11.7 billion worth of shares.
- MOEX introduced an IPO Index (MIPO) to track the performance of equities that recently went public. The index may serve as a benchmark for Russian-law ETFs launched by asset management firms.
- 31.5 million clients held brokerage accounts on MOEX at the end of April. More than 1.8 million clients onboarded since the beginning of the year.
FINANCIAL HIGHLIGHTS
| RUB mln | Q1 2024 | Q1 2023 | YoY | Q4 2023 | QoQ |
| Operating Income | 34 015.3 | 23 211.1 | 46.5% | 34 955.2 | -2.7% |
| · Fee and commission income | 14 533.5 | 9 960.0 | 45.9% | 15 984.0 | -9.1% |
| · Net interest and other finance income (NII) [1] | 19 411.6 | 13 185.1 | 47.2% | 18 851.7 | 3.0% |
| Core NII – NII less realized gains or losses on investment portfolio revaluation [2] | 19 463.0 | 13 176.7 | 47.7% | 19 069.7 | 2.1% |
| · Other operating income | 70.2 | 66.0 | 6.4% | 119.5 | -41.3% |
| Operating Expenses | 9 777.3 | 5 423.5 | 80.3% | 9 910.1 | -1.3% |
| · Personnel expenses | 5 650.9 | 2 712.1 | 108.4% | 5 374.1 | 5.2% |
| · D&A and IT maintenance | 1 631.7 | 1 570.1 | 3.9% | 1 692.8 | -3.6% |
| · Remaining general and administrative expenses | 2 494.7 | 1 141.3 | 118.6% | 2 843.2 | -12.3% |
| Profit before other operating expenses and tax | 24 238.0 | 17 787.6 | 36.3% | 25 045.1 | -3.2% |
| Movement in allowance for expected credit losses | 2.3 | 46.1 | nm | -11.3 | nm |
| Other impairment and provisions | 15.6 | -0.8 | nm | - | nm |
| Profit before tax | 24 255.9 | 17 832.9 | 36.0% | 25 033.8 | -3.1% |
| Income tax | -4 901.2 | -3 498.4 | 40.1% | -4 988.8 | -1.8% |
| Net Profit | 19 354.7 | 14 334.5 | 35.0% | 20 045.0 | -3.4% |
| Basic earnings per share, RUB | 8.56 | 6.35 | 34.8% | 8.86 | -3.4% |
| Net Profit | 19 354.7 | 14 334.5 | 35.0% | 20 045.0 | -3.4% |
| · Movements in allowance for ECLs | -2.3 | -46.1 | nm | 11.3 | nm |
| · Other impairment and provisions | -15.6 | 0.8 | nm | - | nm |
| · Deferred taxes related to movements in allowance for ECLs and other impairment & provisions | 3.6 | 9.1 | nm | -2.3 | nm |
| Adjusted Net Profit | 19 340.4 | 14 298.3 | 35.3% | 20 054.0 | -3.6% |
| EBITDA | 25 502.9 | 19 069.7 | 33.7% | 26 242.0 | -2.8% |
| · Movements in allowance for ECLs | -2.3 | -46.1 | nm | 11.3 | nm |
| · Other impairment and provisions | -15.6 | 0.8 | nm | - | nm |
| Adjusted EBITDA | 25 485.0 | 19 024.4 | 34.0% | 26 253.3 | -2.9% |
| Adjusted EBITDA margin | 74.9% | 82.0% | -7 p.p. | 75.1% | -0.2 p.p. |
OPEX BREAKDOWN
| RUB mln | Q1 2024 | Q1 2023 | YoY | Q4 2023 | QoQ |
|---|---|---|---|---|---|
| General and Administrative Expenses | 4 126.4 | 2 711.4 | 52.2% | 4 536.0 | -9.0% |
| · Amortisation of intangible assets | 1 015.9 | 962.8 | 5.5% | 990.9 | 2.5% |
| · Advertising and marketing costs | 973.8 | 123.8 | 686.6% | 1 051.9 | -7.4% |
| · Equipment and intangible assets maintenance | 385.0 | 333.3 | 15.5% | 484.6 | -20.6% |
| · Taxes, other than income tax | 383.2 | 182.6 | 109.9% | 370.7 | 3.4% |
| · Depreciation of property and equipment | 230.8 | 274.0 | -15.8% | 217.3 | 6.2% |
| · Agent fees | 196.9 | 115.8 | 70.0% | 302.6 | -34.9% |
| · Market makers fees | 196.5 | 153.2 | 28.3% | 187.0 | 5.1% |
| · Professional services | 177.7 | 239.1 | -25.7% | 201.6 | -11.9% |
| · Information services | 172.1 | 77.3 | 122.6% | 85.9 | 100.3% |
| · Registrar and foreign depository services | 137.8 | 88.9 | 55.0% | 201.3 | -31.5% |
| · Rent and office maintenance | 91.5 | 88.5 | 3.4% | 82.8 | 10.5% |
| · Communication services | 20.1 | 22.3 | -9.9% | 26.2 | -23.3% |
| · Charity | 16.6 | 11.5 | 44.3% | 112.4 | -85.2% |
| · Security expenses | 9.7 | 7.2 | 34.7% | 8.4 | 15.5% |
| · Business trip expenses | 8.8 | 6.0 | 46.7% | 18.5 | -52.4% |
| · Transport expenses | 7.9 | 3.9 | 102.6% | 9.0 | -12.2% |
| · Loss on disposal of property, equipment and intangible assets | 3.4 | 5.7 | -40.4% | 100.4 | -96.6% |
| · Other | 98.7 | 15.5 | 536.8% | 84.5 | 16.8% |
| Personnel expenses | 5 650.9 | 2 712.1 | 108.4% | 5 374.1 | 5.2% |
| · Employees benefits except for share-based payments | 3 470.0 | 1 947.2 | 78.2% | 3 834.9 | -9.5% |
| · Payroll related taxes | 1 095.9 | 665.3 | 64.7% | 813.5 | 34.7% |
| · Share-based payment expense on equity settled instruments | - 86.5 | 84.5 | -202.4% | 19.9 | -534.7% |
| · Share-based payment expense on cash settled instruments | 1 171.5 | 15.1 | 7658.3% | 705.8 | 66.0% |
| Total operating expenses | 9 777.3 | 5 423.5 | 80.3% | 9 910.1 | -1.3% |
| Headcount, employees e-o-p | 2 687 | 2 379 | 12.9% | 2 586 | 3.9% |
- OPEX for 1Q’24 increased by 80.3%, largely due to the growth in marketing and personnel expenses against the low base of 1Q’23, which featured the unwinding of bonus provisions.
- Personnel expenses growth of 108.4% YoY decomposes into: [1] 40.3 p.p. LTIP 2028 provisions driven by the stock price performance, [2] 33.3 p.p. bonus provisions, [3] 32.5 p.p. new hires and selective wage revisions, [4] 2.4 p.p. other factors.
- The employee headcount was up 12.9%.
- Advertising and marketing costs increased nearly eightfold on the back of Finuslugi-related spending.
- D&A and IT maintenance grew 3.9% while the D&A alone barely changed, adding just 0.8%. IT maintenance costs increased by 15.5%. The rise in IT maintenance costs is due to the gradual implementation of the software & hardware renewal program.
- 1Q’24 CAPEX was RUB 1.06 billion.
PERFORMANCE OF KEY BUSINESS LINES
| RUB mln | Q1 2024 | Q1 2023 | YoY | Q4 2023 | QoQ |
|---|---|---|---|---|---|
| Equities Market | |||||
| Fee and commission income, RUB mln | 2 026.8 | 998.3 | 103.0% | 1 953.6 | 3.7% |
| Trading volumes, RUB bln | 6 610.1 | 3 304.1 | 100.1% | 6 466.3 | 2.2% |
| Bond Market | |||||
| Fee and commission income, RUB mln | 818.9 | 693.6 | 18.1% | 1 106.2 | -26.0% |
| Trading volumes (ex. overnight bonds), RUB bln | 4 675.5 | 3 969.6 | 17.8% | 7 940.6 | -41.1% |
| FX Market | |||||
| Fee and commission income, RUB mln | 1 931.8 | 1 475.0 | 31.0% | 2 231.2 | -13.4% |
| Trading volumes, RUB bln | 85 673.1 | 60 939.0 | 40.6% | 106 630.3 | -19.7% |
| Money Market | |||||
| Fee and commission income, RUB mln | 3 281.3 | 2 249.0 | 45.9% | 3 759.0 | -12.7% |
| Trading volumes, RUB bln | 219 217.1 | 186 928.6 | 17.3% | 248 246.3 | -11.7% |
| Derivatives Market | |||||
| Fee and commission income, RUB mln | 1 845.8 | 1 178.1 | 56.7% | 2 222.1 | -16.9% |
| Trading volumes, RUB bln | 21 079.6 | 13 771.4 | 53.1% | 25 053.6 | -15.9% |
| Depository and Settlement Services | |||||
| Fee and commission income, RUB mln | 2 602.7 | 2 157.0 | 20.7% | 2 743.1 | -5.1% |
| Average assets under custody, RUB bln | 80 328.3 | 62 566.4 | 28.4% | 77 752.7 | 3.3% |
| Other fee and commission income (IT Services, Listing, Marketplace and other) | 2 026.2 | 1 209.0 | 67.6% | 1 969.1 | 2.9% |
| Information services, RUB mln | 362.2 | 281.0 | 28.9% | 363.1 | -0.2% |
| Sale of software and tech. services, RUB mln | 429.8 | 400.1 | 7.4% | 448.9 | -4.3% |
| Listing and other services, RUB mln | 185.2 | 158.4 | 16.9% | 218.9 | -15.4% |
| Financial marketplace services, RUB mln | 775.1 | 235.6 | 229.0% | 755.7 | 2.6% |
| Other fee income, RUB mln | 273.9 | 133.9 | 104.6% | 182.5 | 50.1% |
| Net interest and other finance income | |||||
| Net interest and other finance income, RUB mln | 19 411.6 | 13 185.1 | 47.2% | 18 851.7 | 3.0% |
| Investment portfolio, RUB bln | 2 776.4 | 2 249.2 | 23.4% | 2 715.9 | 2.2% |
- The total market capitalization of the Equities Market at the end of the first quarter was RUB 62.09 trln (USD 672.18 bln). Both trading volumes and fees from the Equities Market doubled as trading velocity went up. Over 3.7 million clients were active every month during the quarter.
- Fees and commissions from the Bond Market grew 18.1% on the back of the corresponding increase in trading volumes (excluding overnight bonds) of 17.8%. Primary market trading volumes (excluding overnight bonds) went up 22.2%. Secondary trading volumes increased by 13.8%. Secondary trading of OFZ was up 20.7%; other bonds’ volumes were up 8.4%.
- Money Market fee income improved by 45.9%. Trading volumes added 17.3%. The discrepancy between fees and volumes was mainly attributable to the increase in shares of value-added CCP and GCC repo in the volumes’ mix. The effective fee was also supported by the increase of average GCC repo terms. GCC repo segment also benefits from the rising demand for Russian-law money market ETFs. Floating interest rate repo is also on the rise as daily open interest of such deals exceeded RUB 1 trillion in the first quarter.
- Fee income from the FX Market grew 31.0% while trading volumes were up 40.6%. The effective fee dynamics is influenced by the two opposing factors: [1] a lower share of a more profitable small-lot trading, [2] a slight shift in the volumes’ mix towards more profitable spot segment. The former factor outweighed the latter, hence the effective fee declined. Spot volumes increased by 43.2%, while swap volumes gained 39.2%.
- Derivatives Market fees grew by 56.7%, trading volumes were up 53.1%. Volumes’ mix changed towards higher value-added derivative contracts on commodities and interest rates. Specifically, commodity derivatives’ volumes improved by 94.3%. Volumes of interest rate contracts surged 2.5x YoY amidst volatile interest rate environment. The effective fee was also affected by the 5x decrease in options trading fee introduced in April 2023.
- Fee income from the Depository and Settlement Services grew 20.7%. The growth is primarily explained by the 28.4% increase in the average value of assets under custody. The discrepancy between growth rates of fee income and assets on deposit is the result of business lines beyond safekeeping, primarily clearing and collateral management services, which reflect repo operations at the NSD.
- Information sales were up 28.9%, largely due to RUB depreciation. Sales of software and technical services increased by 7.4%. Listing and other services increased by 16.9% as activity on the primary bond market remained strong during the quarter. Finuslugi revenues more than tripled to RUB 775.1 mln with loan aggregation segment performing particularly well. Other fee income grew by 104.6%.
- The cash position[3] at the end of Q1 2024 was RUB 145.52 bln. The company had no debt as of the end of the quarter.
- Capex for the quarter was RUB 1.06 bln, mostly spent on purchases of software and equipment as well as software development.
Moscow Exchange’s summary consolidated IFRS financial statements for Q1 2024 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, Investment financial assets at amortised cost, 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.