MOEX Posts Record Revenues, Minor Downturn in Net Profit for Q2 of 2018

The Moscow Exchange (MOEX), Russia’s largest exchange group, released its financial results for the second quarter of 2018 this Friday. MOEX saw increased year-on-year revenues with record levels of fee and commission income.

Friday’s results show that MOEX had total revenues of RUB 10.18 billion ($150.21 million) in the second quarter of this year. That was a 3.7 percent increase on last year’s second quarter, RUB 9.82 billion ($144.89 million), and a 3.1 percent increase on the first quarter of this year, RUB 9.87 billion ($145.63 million).

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This growth was driven entirely by a strong quarter for the exchange group’s fees and commissions business lines. In its report, MOEX noted that it had set a record for highest revenue generated from those business lines in a single quarter.

In the second quarter of last year the firm reported its income from fees and commission as RUB 5.08 billion ($74.98 million). This year that figure grew by 16.7 percent to RUB 5.93 billion ($87.53 million). That was also a 7.7 percent increase on the first quarter of this year when the firm reported income of RUB 5.51 billion ($81.33 million) from commissions and fees.

The exchange group’s revenue from net interest and other revenue sources actually shrunk quite substantially this quarter. Revenue from this sector of the business was equal to RUB 4.11 billion ($60.66 million) – a 13.2 percent year-on-year decrease and 5.1 percent less than the first quarter of this year.

Operational expenses up, net profits down

Unfortunately for MOEX, operational expenses also increased quite substantially. The second quarter of last year saw total operational expenses of RUB 3.21 billion ($47.38 million). This year the figure grew to RUB 3.50 billion ($51.69 million) – a 9 percent year-on-year increase.

These costs, combined with a one-off cash provision expense of RUB 873.5 million ($12.89 million) meant that MOEX finished its most recent quarter with a net profit of RUB 4.86 billion ($71.73 million). This was an 8.2 percent decrease on last year’s second quarter but a 13.5 percent increase on the first quarter of this year.

For those that are interested, the provisional expense pertains to a court case brought against MOEX by the bankruptcy manager of a defaulted company. According to MOEX’s report, the case is ongoing but, on a positive note for the exchange group, the Bank of Russia has joined the case on their side.