- Intensive share buyback execution drove Earnings per Share (“EPS”) to stability, offsetting weaker results in a more challenging environment for volumes;
- New registration platform is receiving recurring flows of fixed-income securities.
BM&FBOVESPA S.A. (ticker: BVMF3) today reported first quarter earnings ending March 31, 2014 (“1Q14”). Total revenue reached R$546.1 million, a 5.9% decrease compared with 1Q13 and a 4.2% climb in the quarter-over-quarter comparison.
BM&FBOVESPA is reaffirming its previously announced budget ranges: (i) adjusted expenses[1] of R$595 million to R$615 million for 2014; and (ii) capital expenditure (“Capex”) budget ranges of R$230 million to R$260 million for 2014 and R$190 million to R$220 million for 2015.
1Q14 Highlights:
- In the BM&F Segment, the average rate per contract (“RPC”) grew 8.0% in 1Q14 compared to 1Q13, due to higher prices from FX (+13.4%) and USD-denominated interest rates (+28.4%) contracts.
- Revenue from the BM&F segment rose by 2.1% year-over-year, partially offsetting a decline in the performance of the Bovespa segment and in revenue not related to volumes traded.
- In the Bovespa segment, average daily trading value (“ADTV”) fell 14.1% compared to the previous year’s first quarter, reflecting a combination of lower average market capitalization that fell 10.1% and decrease in the turnover velocity, which reached 69.3% in 1Q14.
- Tesouro Direto maintained its growth trend, achieving a new all-time high in both average assets under custody (+9.0%) and the average number of investors (+20.1%).
- The financial value of registered agribusiness credit bills (“LCAs”, or Letras de Crédito do Agronegócio) reached R$94.0 billion in Mar-14, 124.4% growth compared to Mar-13.
- Adjusted expenses reached R$136.5 million in 1Q14, up 10.1% compared to 1Q13.
- Adjusted net income[2] reached R$375.3 million in 1Q14, a 4.9% decrease from 1Q13; while adjusted EPS was R$0.203 in 1Q14, a 0.7% decrease from 1Q13, since the share buyback partially offset the net income decrease.
- R$204.9 million in dividends, totaling 80% of 1Q14 GAAP net income.
Chief Executive Officer of BM&FBOVESPA, Edemir Pinto, said: “2014 is going to be an important year in the execution of our strategic plan. It started with regulatory approval to launch the new iBalcão module for registration of financial securities, expanding the services we provide in the over the counter (“OTC”) market and the conclusion of the construction of the new data center. Now, we are focused on deploying the derivatives phase of our new integrated clearinghouse, which will deliver operational and capital efficiency to market participants and investors”. Mr. Pinto added: “These developments coupled with the implementation of the PUMA Trading System in 2013 are creating one of the most modern exchanges in the world, which strengthens our strategic position in the Brazilian market and fosters market innovation and development.”
Chief Product and Investor Relations Officer, Eduardo Refinetti Guardia, commented: “In this quarter we reaffirmed our commitment with our shareholders and intensified the execution of our share buyback program, what offset the decrease in results compared to the first quarter of 2013 and drove EPS to stability”.
[1] Expenses adjusted to Company´s depreciation, stock options plan costs, tax on dividends from the CME Group and provisions.
[2] Net income adjusted by (i) the effect of deferred liability recognition in connection with temporary differences from amortization of goodwill for tax purposes; (ii) the impact of the stock options plan; (iii) investment in affiliates (CME Group) accounted for under the equity method, net of taxes; and (iv) taxes paid overseas to be compensated.