- Stable operating expenses in line with budget range for 2014
- Share buyback totaled R$337.7 million from March to July 2014 (30.2 million shares)
- R$200.1 million in dividends, totaling 80% of 2014 GAAP net income
- Derivatives phase of the new integrated clearinghouse approved by Central Bank
BM&FBOVESPA S.A. (ticker: BVMF3) today reported second quarter earnings ending June 30, 2014 (“2Q14”). Lower volumes drove revenue to a 22.8% decrease compared to the second quarter of 2013 (“2Q13”), while expenses were flat as a result of the company’s expense discipline.
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”) of R$230 million to R$260 million for 2014 and R$190 million to R$220 million for 2015.
2Q14 Highlights:
- In the BM&F Segment, the 37.9% fall in the average daily volume (“ADV”) was partially offset by the 23.1% growth in the average rate per contract (“RPC”) in 2Q14 compared to 2Q13;
- In the Bovespa segment, the average daily trading value (“ADTV”) declined 18.7% from the year-ago second quarter, reflecting a combination of lower turnover velocity, which reached 66.6% in 2Q14, and a flat average market capitalization;
- The y-o-y revenue comparison was impacted by fewer trading days (60 in 2Q14 versus 63 in 2Q13) and by the fact that all-time high volumes and revenue in both Bovespa and BM&F segments were reached in 2Q13, reflecting higher volatility and better macroeconomic outlook in that quarter;
- Tesouro Direto maintained its growth trend, achieving a new all-time high in both average assets under custody (+25.3%) and the average number of investors (+22.7%);
- The financial value of registered agribusiness credit bills (“LCAs”, or Letras de Crédito do Agronegócio) reached R$103.6 billion in Jun-14, 98.1% growth compared to Jun-13;
- The company maintained its rigorous expense control and adjusted expenses reached R$134.1 million in 2Q14, flat compared to 2Q13;
- Financial result grew 38.2%, reflecting higher interest rates in Brazil;
- Adjusted net income[2] reached R$372.8 million in 2Q14, a 20.6% decrease from 2Q13, while adjusted EPS fell 16.8% to R$0.203 in 2Q14, as the execution of the company’s share buyback reduced the stock dilution.
Chief Executive Officer of BM&FBOVESPA, Edemir Pinto, said: “2014 has been a more challenging year for volumes in both equities and derivatives markets, mainly reflecting low market volatility and changes in the macroeconomic outlook. However, significant developments have been made in our strategic plan that should pave the way for our long-term growth. We have advanced in the goal of building a state-of-the-art technological infrastructure by setting for later this month the implementation of the derivatives phase of our new integrated Clearinghouse, which will increase market efficiency. On the regulatory front, we were pleased to see the announcement of government incentives to develop the access market for small and medium enterprises, as a result of extensive studies conducted by government organizations, market participants, and BM&FBOVESPA”
Chief Product and Investor Relations Officer, Eduardo Refinetti Guardia, commented: “We maintained our expense discipline this quarter and remain confident that we will deliver FY14 adjusted expenses growth below average inflation. In addition, we reaffirmed our commitment to our shareholders by maintaining an 80% payout ratio in 2Q14 and executing the share repurchase program that has already reached 3.5% of the free-float in 2014.”
Click here for full details.
[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.