Moscow Exchange announces results for the second 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 Q2 2024.
Unless stated otherwise, all figures below refer to performance in Q2 2024 and all comparisons are with the corresponding period last year.
KEY FINANCIAL HIGHLIGHTS FOR Q2 2024
- Fee and commission (F&C) income totalled RUB 15.54 bln.
- Net interest income (NII) was RUB 21.23 bln.
- Operating income amounted to RUB 36.8 bln.
- Adjusted net profit was RUB 19.49 bln.
KEY BUSINESS & CORPORATE HIGHLIGHTS FOR Q2 2024
- Shares of four non-resource companies start trading following IPOs or direct listings. The companies raised a total of RUB 18.3 bln. Two issuers held SPOs worth RUB 19.7 bn.
- The range of derivative contracts on the Derivatives Market expanded with the launch of the cash-settled futures contracts on the iShares MSCI Emerging Markets ETF and shares of Alibaba and Baidu, as well as deliverable futures contracts on shares of five Russian companies.
- MOEX rolled out Datashop, a digital platform for access to financial data, information and analytical services. Datashop offers Compliance Tool, a service designed for compliance teams in publicly traded companies and professional market participants.
- Four ETFs and an open-end fund began trading.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
- Another three companies from non-resource sectors did IPOs, raising a total of RUB 21.4 billion.
- ACRA and Expert RA assigned Moscow Exchange the highest credit ratings of AAA(RU) and ruAAA, respectively – both with a stable outlook. These ratings open up additional opportunities to further expand the range of MOEX fintech products, primarily via Finuslugi marketplace.
- 40 new non-listed equities were added to CCP-based OTC trading mode, bringing the total to 97.
- A futures contract on the MOEX IPO Index (MIPO), as well as eight cash-settled premium options on Russian equities were launched.
- Moscow Exchange launched the IR Workshop, a training programme for investor relations professionals.
- 32.8 million clients had brokerage accounts on MOEX at the end of July. More than 3 million customers have accessed MOEX's markets since the beginning of the year.
FINANCIAL HIGHLIGHTS (RUB million)
| Q2 2024 | Q2 2023 | YoY | Q1 2024 | QoQ | |
|---|---|---|---|---|---|
| Operating Income | 36 806.7 | 20 896.1 | 76.1% | 34 015.3 | 8.2% |
| · Fee and commission income | 15 538.8 | 11 933.0 | 30.2% | 14 533.5 | 6.9% |
| · Net interest and other finance income (NII) [1] | 21 227.1 | 8 958.3 | 137.0% | 19 411.6 | 9.4% |
| Core NII – NII less realized gains or losses on investment portfolio revaluation [2] | 21 280.0 | 9 272.7 | 129.5% | 19 463.0 | 9.3% |
| · Other operating income | 40.8 | 4.8 | 750.0% | 70.2 | -41.9% |
| Operating Expenses | 12 464.3 | 5 906.5 | 111.0% | 9 777.3 | 27.5% |
| · Personnel expenses | 7 653.4 | 2 902.4 | 163.7% | 5 650.9 | 35.4% |
| · D&A and IT maintenance | 1 764.8 | 1 606.6 | 9.8% | 1 631.7 | 8.2% |
| · Remaining general and administrative expenses | 3 046.1 | 1 397.5 | 118.0% | 2 494.7 | 22.1% |
| Profit before other operating expenses and tax | 24 342.4 | 14 989.6 | 62.4% | 24 238.0 | 0.4% |
| Movement in allowance for expected credit losses (ECLs) | -146.9 | 356.6 | nm | 2.3 | nm |
| Other impairment and provisions | - | -232.9 | nm | 15.6 | nm |
| Profit before tax | 24 195.5 | 15 113.3 | 60.1% | 24 255.9 | -0.2% |
| Income tax | -4 700.6 | -3 003.0 | 56.5% | -4 901.2 | -4.1% |
| Net Profit | 19 494.9 | 12 110.3 | 61.0% | 19 354.7 | 0.7% |
| Basic earnings per share, RUB | 8.62 | 5.37 | 60.5% | 8.56 | 0.7% |
| Net Profit | 19 494.9 | 12 110.3 | 61.0% | 19 354.7 | 0.7% |
| · Movements in allowance for ECLs | 146.9 | -356.6 | nm | -2.3 | nm |
| · Other impairment and provisions | - | 232.9 | nm | -15.6 | nm |
| · Deferred taxes related to movements in allowance for ECLs and other impairment & provisions | -29.4 | 24.7 | nm | 3.6 | nm |
| Adjusted Net Profit | 19 612.4 | 12 011.3 | 63.3% | 19 340.4 | 1.4% |
| EBITDA | 25 486.9 | 16 342.6 | 56.0% | 25 502.6 | -0.1% |
| · Movements in allowance for ECLs | 146.9 | -356.6 | nm | -2.3 | nm |
| · Other impairment and provisions | - | 232.9 | nm | -15.6 | nm |
| Adjusted EBITDA | 25 633.8 | 16 218.9 | 58.0% | 25 484.7 | 0.6% |
| Adjusted EBITDA margin | 69.6% | 77.6% | -8.0 p.p. | 74.9% | -5.3 p.p. |
OPEX BREAKDOWN (RUB million)
| Q2 2024 | Q2 2023 | YoY | Q1 2024 | QoQ | |
|---|---|---|---|---|---|
| General and Administrative Expenses | 4 810.9 | 3 004.1 | 60.1% | 4 126.4 | 16.6% |
| · Advertising and marketing costs | 1 389.2 | 300.7 | 362.0% | 973.8 | 42.7% |
| · Amortisation of intangible assets | 1 038.8 | 973.3 | 6.7% | 1 015.9 | 2.3% |
| · Equipment and intangible assets maintenance | 473.4 | 377.3 | 25.5% | 385.0 | 23.0% |
| · Professional services | 308.7 | 213.0 | 44.9% | 177.7 | 73.7% |
| · Taxes, other than income tax | 293.6 | 165.8 | 77.1% | 383.2 | -23.4% |
| · Agent fees | 264.0 | 162.9 | 62.1% | 196.9 | 34.1% |
| · Depreciation of property and equipment | 252.6 | 256.0 | -1.3% | 230.8 | 9.4% |
| · Market makers fees | 215.6 | 173.6 | 24.2% | 196.5 | 9.7% |
| · Information services | 182.1 | 85.3 | 113.5% | 172.1 | 5.8% |
| · Registrar and foreign depository services | 170.9 | 116.3 | 46.9% | 137.8 | 24.0% |
| · Rent and office maintenance | 85.4 | 83.9 | 1.8% | 91.5 | -6.7% |
| · Charity | 30.1 | 3.3 | 812.1% | 16.6 | 81.3% |
| · Communication services | 27.9 | 27.2 | 2.6% | 20.1 | 38.8% |
| · Business trip expenses | 25.0 | 18.1 | 38.1% | 8.8 | 184.1% |
| · Security expenses | 11.9 | 9.9 | 20.2% | 9.7 | 22.7% |
| · Transport expenses | 8.5 | 5.4 | 57.4% | 7.9 | 7.6% |
| · Loss on disposal of property, equipment and intangible assets | 0.8 | 12.4 | -93.5% | 3.4 | -76.5% |
| · Other | 32.4 | 19.7 | 64.5% | 98.7 | -67.2% |
| Personnel expenses | 7 653.4 | 2 902.4 | 163.7% | 5 650.9 | 35.4% |
| · Employees benefits except for share-based payments | 3 659.9 | 2 330.1 | 57.1% | 3 470.0 | 5.5% |
| · Payroll related taxes | 1 184.2 | 488.4 | 142.5% | 1 095.9 | 8.1% |
| · Share-based payment expense on equity settled instruments | 219.7 | 71.9 | 205.6% | - 86.5 | -354.0% |
| · Share-based payment expense on cash settled instruments | 2 589.6 | 12.0 | 21480.0% | 1 171.5 | 121.0% |
| Total operating expenses | 12 464.3 | 5 906.5 | 111.0% | 9 777.3 | 27.5% |
| Headcount, employees e-o-p | 2 828 | 2 405 | 17.6% | 2 687 | 5.2% |
- OPEX for 2Q’24 increased by 111.0% YoY, largely due to the growth in personnel and marketing expenses.
- Personnel expenses growth of 163.7% decomposes into: [1] 109.0 p.p. LTIP 2028 provisions driven by the stronger than expected fundamentals and the stock price performance, [2] 28.6 p.p. bonus provisions amid low base effect, [3] 17.7 p.p. new hires and selective wage revisions, [4] 8.4 p.p. other factors.
- The employee headcount was up 17.6%. New hires are primarily related to strategic business directions of market data and information services as well as the overall strengthening of the IT function.
- Advertising and marketing costs surged 4.6x on the back of Finuslugi-related spending.
- The increase in taxes, other than income tax is related to VAT.
- The 113.5% growth in information services expenses attributes to the Derivatives Market and gets reimbursed with its revenues.
- D&A and IT maintenance grew 9.8%, while the D&A added 5.1%. IT maintenance costs increased by 25.5%. The rise in IT maintenance costs is due to the gradual implementation of the software & hardware renewal program.
- 2Q’24 CAPEX was RUB 2.06 billion. 6M’24 CAPEX amounted to RUB 3.12 billion.
PERFORMANCE OF KEY BUSINESS LINES
| Q2 2024 | Q2 2023 | YoY | Q1 2024 | QoQ | |
|---|---|---|---|---|---|
| Equities Market | |||||
| Fee and commission income, RUB mln | 2 392.7 | 1 617.5 | 47.9% | 2 026.8 | 18.1% |
| Trading volumes, RUB bln | 7 729.5 | 5 332.5 | 45.0% | 6 610.1 | 16.9% |
| Bond Market | |||||
| Fee and commission income, RUB mln | 899.1 | 712.2 | 26.2% | 818.9 | 9.8% |
| Trading volumes (ex. overnight bonds), RUB bln | 5 033.3 | 3 968.3 | 26.8% | 4 675.5 | 7.7% |
| Money Market | |||||
| Fee and commission income, RUB mln | 3 820.7 | 2 767.0 | 38.1% | 3 281.3 | 16.4% |
| Trading volumes, RUB bln | 247 690.0 | 184 027.1 | 34.6% | 219 217.1 | 13.0% |
| Derivatives Market | |||||
| Fee and commission income, RUB mln | 2 244.9 | 1 464.4 | 53.3% | 1 845.8 | 21.6% |
| Trading volumes, RUB bln | 23 204.1 | 17 758.3 | 30.7% | 21 079.6 | 10.1% |
| Other markets | |||||
| Fee and commission income, RUB mln | 1 785.3 | 1 641.7 | 8.7% | n.a. | n.m. |
| Trading volumes, RUB bln | 77 903.2 | 66 820.4 | 16.6% | 85 865.2 | -9.3% |
| Depository and Settlement Services | |||||
| Fee and commission income, RUB mln | 2 541.4 | 2 298.6 | 10.6% | 2 602.7 | -2.4% |
| Average assets under custody, RUB bln | 81 072.3 | 69 949.8 | 15.9% | 80 328.3 | 0.9% |
| Other fee and commission income (IT Services, Listing, Marketplace and other) | 1 854.7 | 1 431.6 | 29.6% | 1 752.3 | 5.8% |
| Information services, RUB mln | 336.3 | 340.5 | -1.2% | 362.2 | -7.2% |
| Sale of software and tech. services, RUB mln | 439.0 | 385.5 | 13.9% | 429.8 | 2.1% |
| Listing and other services, RUB mln | 195.3 | 178.7 | 9.3% | 185.2 | 5.5% |
| Financial marketplace services, RUB mln | 656.3 | 358.5 | 83.1% | 775.1 | -15.3% |
| Other fee income, RUB mln | 227.8 | 168.4 | 35.3% | n.a. | n.m. |
| Net interest and other finance income | |||||
| Net interest and other finance income, RUB mln | 21 227.1 | 8 958.3 | 137.0% | 19 411.6 | 9.4% |
| Investment portfolio, RUB bln | 3 006.9 | 2 166.5 | 38.8% | 2 776.4 | 8.3% |
- The total market capitalization of the Equities Market at the end of the second quarter of 2024 was RUB 57.73 trln. Fees from the Equities Market grew by 47.9% on the back of a similar increase in trading volumes, which gained 45.0%. The effective fee was positively affected by the growing volumes of value-added, CCP-based OTC trading mode. Over 3.6 million clients were active every month during the quarter.
- Fees and commissions from the Bond Market grew 26.2% on the back of the corresponding increase in trading volumes (excluding overnight bonds) of 26.8%, which was largely driven by the elevated primary market activity. Primary market trading volumes (excluding overnight bonds) went up 37.9%, while the secondary trading volumes increased by 18.1%. The supply of floating-rate issues supported the share of primary market volumes in the total volumes’ mix. However, floating-rate bonds have a lower trading velocity compared to fixed-rate bonds. Secondary trading of OFZs was up 25.3%; other bonds’ volumes were up 12.1%.
- Money Market fee income improved by 38.1%. Trading volumes added 34.6%. The slight 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. The GCC repo segment also benefits from the rising demand for Russian-law money market ETFs.
- Fee income from the Depository and Settlement Services grew 10.6%. The growth is primarily explained by the 15.9% 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.
- Derivatives Market fees grew by 53.3%, trading volumes were up 30.7%. The volumes’ mix changed towards higher value-added derivative contracts on commodities and interest rates. Specifically, commodity derivatives’ volumes doubled. The volumes of interest rate contracts surged 4.0x YoY amid the demand for interest rate hedging.
- Information sales decreased by 1.2%. Sales of software and technical services were up by 13.9% because of a rise in demand for these products. Listing and other services increased by 9.3% as activity on the primary bond and equities markets remained strong during the quarter. Finuslugi revenues improved by 83.1% to RUB 656.3 mln with deposit and loan segments performing particularly well. Other fee income grew by 35.3%.
- Fee income from other markets grew 8.7% while trading volumes were up 16.6%.
- The cash position[3] at the end of Q2 2024 was RUB 122.75 bln. The company had no debt as of the end of the quarter.
- Capex for the quarter was RUB 2.06 bln, mostly spent on purchases of software and equipment as well as software development.
Moscow Exchange’s summary consolidated IFRS financial statements for Q2 2024 are available in the Investor Relations section of the company's web site.
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.
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