- Strong performance in the Bovespa segment and higher revenues from other services not tied to volumes drove 14.7% growth in the top line in the quarter compared to 4Q15
- R$3.0 billion debentures issuance and an USD125.0 million loan were concluded in Dec’16 in preparation for the expected conclusion of transaction that will result in the business combination with Cetip1
- Excluding non-recurring items, the 4Q16 net income would have amounted to R$524.9 million
BM&FBOVESPA S.A. (ticker: BVMF3) today reported its fourth-quarter earnings for the period ending on December 31st, 2016 (4Q16). Total revenues reached R$691.9 million in 4Q16, an increase of 14.7% compared to the same period of the previous year (4Q15), mainly impacted by higher volumes in the Bovespa segment and increased revenues from business lines not related to volumes.
Adjusted expenses2 (OPEX) and capital expenditures (CAPEX) in 2016 were in line with the previously announced budgets. Adjusted OPEX amounted to R$653.1 million (budget of R$640 million – R$670 million) while CAPEX totaled R$223.7 million (budget of R$200 million – R$230 million). Furthermore, the budgets for 2017 were announced in Dec’163: the 2017 adjusted OPEX budget ranges from R$675 million to R$705 million and the CAPEX budget ranges from R$165 million to R$195 million.
Highlights of 4Q16:
- In the BM&F segment, average daily volume (ADV) grew 55.9% over 4Q15, while average revenue per contract (RPC) decreased 35.8% in the same period;
- Average daily trading value (ADTV) in the Bovespa segment grew 26.3% over 4Q15, to R$8.7 billion in 4Q16, while trading and post-trading margins fell 3.6%, a reduction of 0.190 bps;
- Average assets under custody in the Tesouro Direto platform grew 76.8% year-over-year, while the average number of investors increased 75.3% in the period;
- Roughly R$3.4 billion raised through debt transactions, both concluded in Dec’16 and connected to the business combination with Cetip;
- Adjusted expenses reached R$206.6 million in 4Q16, an increase of 21.2% over 4Q15, mainly reflecting the transfer of proceeds to our self-regulatory organization (BSM);
- R$368.0 million in interest on capital approved in Dec’16; in FY16, R$900.0 million in interest on capital approved, totaling 62.2% of FY16 IFRS net income.
Chief Executive Officer of BM&FBOVESPA, Edemir Pinto, said: “2016 was a year of transformational achievements for BM&FBOVESPA. We have moved forward in the execution of our long-term strategic plan. The business combination with Cetip was supported and approved by the vast majority of shareholders of both companies. Now, while we wait for the regulators to analyze this transaction, we have begun planning some aspects of the integration, within the boundaries established by regulation, to ensure service excellence will be preserved, expected efficiencies will be delivered and potential synergies will be captured over time. We also had significant progress in the development of the equities phase of the new integrated BM&FBOVESPA Clearinghouse and CORE risk system, which are expected to deliver operational and capital efficiency for market participants and investors. In 2016, we also worked on enhancements to our special listing segments in terms of corporate governance standards and on the execution of our long-term strategy for Latin America, which includes minority investments in some local exchanges. In 2017, we will maintain our focus on the execution and implementation of these strategic initiatives as well as our high standards in terms of operations and technology aimed at exceeding the expectations of our clients and regulators”.
Chief Financial and Investor Relations Officer, Daniel Sonder, commented: “In Dec’16 we raised R$3.4 billion through debt transactions. It was another important step in preparing for the business combination with Cetip. It is important to mention that this higher financial leverage is a temporarily situation and we expect to pay down this new debt within a 3 years period, assuming the business performs according to plan. At the same time that we intend to reduce our financial leverage, we intend to keep returning capital to our shareholders, which will be possible due to the strong capacity of our company to generate cash. Our internal focus on expense management continues, and will be a priority during the merger integration”.
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