Moscow Exchange announces results for Q3 2022
Unless stated otherwise, all figures below refer to performance in Q3 2022 and all comparisons are with the corresponding period of 2021, based on IFRS financials.
HIGHLIGHTS FOR Q3 2022
- Fee and commission (F&C) income decreased by 14.3% to RUB 8,927.9 mln.
- During the quarter, MOEX experienced a decline in trading volumes that translated into F&C income reduction. The decline was mainly due to the contraction of non-resident trading and lower RUB asset price levels.
- EBITDA rose by 27.5% to RUB 11,906.1 mln. Net profit added 29.3% to RUB 8,714.8 mln.
PERFORMANCE OF KEY BUSINESS LINES
| RUB mln | Q3 2022 | Q3 2021 | YoY | Q2 2022 | QoQ |
|---|---|---|---|---|---|
| Equities Market | |||||
| Fee and commission income, RUB mln | 559.4 | 1 185.6 | -52.8% | 466.7 | 19.9% |
| Trading volumes, RUB bln | 3 121.3 | 6 772.1 | -53.9% | 2 522.3 | 23.7% |
| Bond Market | |||||
| Fee and commission income, RUB mln | 486.2 | 649.9 | -25.2% | 244.1 | 99.2% |
| Trading volumes (excl. overnight bonds), RUB bln | 2 749.9 | 5 109.4 | -46.2% | 1 450.1 | 89.6% |
| FX Market | |||||
| Fee and commission income, RUB mln | 1 526.8 | 942.9 | 61.9% | 1 160.0 | 31.6% |
| Trading volumes, RUB bln | 57 718.4 | 74 547.3 | -22.6% | 55 875.6 | 3.3% |
| Money Market | |||||
| Fee and commission income, RUB mln | 2 071.4 | 3 043.9 | -31.9% | 2 246.0 | -7.8% |
| Trading volumes, RUB bln | 150 027.3 | 131 581.7 | 14.0% | 164 075.1 | -8.6% |
| Derivatives Market | |||||
| Fee and commission income, RUB mln | 1 055.9 | 1 239.3 | -14.8% | 555.6 | 90.0% |
| Trading volumes, RUB bln | 15 964.8 | 37 104.2 | -57.0% | 15 032.5 | 6.2% |
| ITSLM (IT Services, Listing and Marketplace) fee income | 865.1 | 1 002.2 | -13.7% | 825.1 | 4.8% |
| Information services, RUB mln | 248.8 | 295.6 | -15.8% | 263.6 | -5.6% |
| Sale of software and tech. services, RUB mln | 301.6 | 320.7 | -6.0% | 270.2 | 11.6% |
| Listing and other services, RUB mln | 154.7 | 191.0 | -19.0% | 108.2 | 43.0% |
| Financial marketplace services, RUB mln | 160.0 | 194.9 | -17.9% | 183.1 | -12.6% |
| Other business lines, RUB mln | 2 363.1 | 2 347.8 | 0.7% | 2 558.8 | -7.6% |
| Total fee and commission income | 8 927.9 | 10 411.6 | -14.3% | 8 056.3 | 10.8% |
- The total market capitalization of the Equities Market as of the end of the third quarter was RUB 33.75 trln (USD 587.78 bln). Fee and commission income from the Equities Market fell by 52.8% on the back of a nearly identical decrease in trading volumes of 53.9%.
- Fees and commissions from the Bond Market decreased by 25.2% as trading volumes excluding overnight bonds shrank by 46.2%. Positive quarterly dynamics in both fees and volumes is explained by a resurgent primary market. Effective fee was supported by a migration of trading volumes to value-added CCP-based trading modes as well as the primary market activity.
- Fee income from the FX Market was up 61.9% while trading volumes decreased by 22.6%. The discrepancy between fees and volumes dynamics is explained by the two main factors: [1] new tariff structure introduced in August 2022 that favors liquidity makers; [2] a shift in trading volumes’ mix towards spot segment. Spot volumes gained 17.8% while swap volumes shrank by 38.3% amid a general economic trend of decreasing FX exposure.
- Money Market fee income declined by 31.9%. Trading volumes were up 14.0%. The discrepancy between volumes and fees dynamics was mainly attributable to a drop in repo terms and a contraction in FX repo activity. Overall on-exchange repo terms on average decreased by 8%, to 4.9 days. Average GCC repo terms fell by 57% to 2.9 days. On a quarterly basis, repo terms started to recover.
- Derivatives Market fee income was down 14.8% as trading volumes declined by 57.0%. The effective fee dynamics is the result of a shift in the structure of trading volumes and a new asymmetric tariff structure implemented in June 2022. The new tariff structure favors liquidity makers. Quarterly fee dynamics is also influenced by the suspension of a marketing discount.
- Sales of software and technical services declined by 6.0%. Information services line decreased by 15.8% on the back of a ruble appreciation and a decline in demand from non-resident clientele. Listing and other services declined 19.0% due to lower primary bond market activity, despite positive quarterly dynamics. Financial marketplace services fees accounted for RUB 160.0 mln.
- Other business lines added 0.7% and accounted for nearly RUB 2.4 bln.
BALANCE SHEET SUMMARY
| RUB mln | Q3 2022 | Q3 2021 | YoY | Q2 2022 | QoQ |
|---|---|---|---|---|---|
| Total assets | 5 926 077.3 | 5 896 392.3 | 0.5% | 6 245 511.5 | -5.1% |
| Total liabilities | 5 761 553.6 | 5 761 969.8 | 0.0% | 6 088 924.6 | -5.4% |
| Total equity | 164 523.7 | 134 422.5 | 22.4% | 156 586.9 | 5.1% |
OPEX BREAKDOWN
| RUB mln | Q3 2022 | Q3 2021 | YoY | Q2 2022 | QoQ |
|---|---|---|---|---|---|
| General and Administrative Expenses | 2 494.4 | 2 592.7 | -3.8% | 2 931.6 | -14.9% |
| Amortisation of intangible assets | 814.6 | 687.6 | 18.5% | 770.4 | 5.7% |
| Equipment and intangible assets maintenance | 393.5 | 463.8 | -15.2% | 479.4 | -17.9% |
| Advertising and marketing costs | 161.3 | 97.1 | 66.1% | 451.4 | -64.3% |
| Depreciation of property and equipment | 296.3 | 231.8 | 27.8% | 306.3 | -3.3% |
| Taxes, other than income tax | 206.8 | 162.5 | 27.3% | 277.4 | -25.5% |
| Professional services | 187.3 | 137.1 | 36.6% | 152.9 | 22.5% |
| Agent fees | 93.6 | 123.0 | -23.9% | 126.3 | -25.9% |
| Market makers fees | 97.3 | 199.7 | -51.3% | 71.3 | 36.5% |
| Registrar and foreign depository services | 60.0 | 155.3 | -61.4% | 62.6 | -4.2% |
| Rent and office maintenance | 88.6 | 88.4 | 0.2% | 78.7 | 12.6% |
| Information services | 38.1 | 172.0 | -77.8% | 9.5 | 301.1% |
| Communication services | 18.8 | 26.6 | -29.3% | 33.9 | -44.5% |
| Security expenses | 7.6 | 7.6 | 0.0% | 7.3 | 4.1% |
| Business trip expenses | 5.9 | 3.9 | 51.3% | 11.4 | -48.2% |
| Transport expenses | 2.1 | 2.5 | -16.0% | 5.9 | -64.4% |
| Loss on disposal of property, equipment and intangible assets | 3.9 | - | n.m. | 4.3 | -9.3% |
| Other | 18.7 | 33.8 | -44.7% | 82.6 | -77.4% |
| Personnel expenses | 2 894.8 | 2 358.6 | 22.7% | 2 873.4 | 0.7% |
| Employees benefits except for share-based payments | 2 384.7 | 1 883.0 | 26.6% | 2 431.9 | -1.9% |
| Payroll related taxes | 434.1 | 352.6 | 23.1% | 433.2 | 0.2% |
| Share-based payment expense on equity settled instruments | 67.3 | 103.0 | -34.7% | 0.2 | n.m. |
| Share-based payment expense on cash settled instruments | 8.7 | 20.0 | -56.5% | 8.1 | 7.4% |
| Total operating expenses | 5 389.2 | 4 951.3 | 8.8% | 5 805.0 | -7.2% |
| Headcount, employees e-o-p | 2 394 | 2 146 | 11.6% | 2 377 | 0.7% |
- OPEX for 3Q’22 added 8.8% YoY. The non-organic contribution from NTPro (consolidated in October 2021) was 0.9 p.p. The total contribution from Finuslugi marketplace was 0.7 p.p. Therefore, core business OPEX increased by 8.1% YoY – below the CPI rate.
- Advertising and marketing costs decreased by 64.3% QoQ as the Finuslugi promo campaign came to conclusion.
- A rise in personnel expenses of 22.7% YoY is explained by several factors: [1] 15.8 p.p. net effect of additional bonus provisions for 1H’22, [2] 9.3 p.p. stemming from new hires and wage reviews, [3] -2.4 p.p. LTIP.
- Headcount measured by the number of employees increased 11.6% YoY, breaking down into: [1] 7.1 p.p. growth of IT personnel, incl. outsourced IT personnel brought in-house, [2] 2.9 p.p. NTPro acquisition, [3] 1.6 p.p. other hires.
- Market makers’ fees contracted by 51.3% on the back of trading volumes decline.
- D&A and IT maintenance added 8.8% YoY on the back of 20.8% growth in D&A. The latter is explained by higher CAPEX of 4Q’21. IT maintenance costs decreased 15.2% YoY.
- Capex for the quarter was RUB 1.04 bln, mostly attributable to purchases and development of software.
- FY’22 OPEX growth expectation is below 20% YoY.
- Updated FY’22 CAPEX guidance: RUB 3.8-4.3 bln.
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.