Euronext, Europe’s largest exchange, has reported its latest tranche of financial metrics for Q2 2016, which underwent a slight rise in revenues and other key figures relative to earlier this year, according to its latest earnings release.
The exchange has been battling diminished volumes throughout the 2016 calendar year, which reached a nadir back in Q1 2016. Since then, Brexit volatility has sparked trading at Euronext, and for that matter almost every other trading venue, which has led to rebounding metrics across the board, not necessarily reflected in the latest earnings.
In terms of revenues in Q2 2016, Euronext disclosed a figure of $146.9 million (€132.3 million), up 4.6% QoQ from $140.5 million (€126.5 million) in Q1 2016. In addition, the exchange managed to best its 2015 revenues, albeit by a more tepid margin of 1.7% YoY $144.4 million (€130.1 million) in Q2 2015.
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In particular, the latest revenues were dictated by lighter volumes as investors reduced risk exposure ahead of the UK referendum on 23 June 2016. It will be interesting to see if volumes in the aftermath of the Brexit will lead to a better performance in H2 2016.
In addition, Euronext reported operational expenses that were virtually congruent with the previous quarter. In Q2 2016, the exchange reported a figure of $60.6 million (€54.6 million), essentially unchanged QoQ from $60.7 million (€54.7 million) in Q1 2016. However, when measured against 2015, expenses orchestrated a decline of -9.0% YoY from $69.1 million (€62.2 million) in Q2 2015. These savings came as a result of stricter execution of Euronext’s cost reduction plan as compensation costs fell by €3.9 million in the quarter.
According to Stéphane Boujnah, chairman and CEO of the managing board of Euronext NV, in a recent statement on the earnings: “Euronext has delivered its most profitable quarter since the IPO despite market uncertainty causing lighter volumes until the outcome of the UK referendum on 23 June 2016.”
“It reinforces our confidence in our capability to deliver the company’s Agility for Growth plan, which is built on the resilience of our core business with ongoing cost discipline and growth in selected initiatives. In spite of the uncertainties for the second half of 2016, we are well positioned to capture opportunities arising from changes in the industry landscape,” Boujnah added.