MOEX’s Q1 Financials See Profits Decline, Weighed Down by FX, Derivatives

MOEX's operating income and profits were both lower in Q1, also recording an uptick in expenses.

Moscow Exchange (MOEX), Russia’s largest institutional trading venue, has reported its Q1 2017 report, which detailed its operating figures and financial results. The biggest change this quarter was a dive in its derivatives volumes, though its fees across multiple segments reported a wide change on a yearly basis.

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In particular, MOEX reported an operating income of $164.4 million (RUB 9.46 billion) in Q1 2017, which was lower by -19.4 percent year-over-year from $204.0 million (RUB 11.74 billion) in Q1 2016. On a quarterly basis, the decline was much less pronounced, falling by only -7.5 percent quarter-over-quarter from $177.8 million (RUB 10.24 billion) in Q4 2016.

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Looking closer at its income, MOEX’s fees were changed across a number of key segments – this was led by fee and commission income from the fixed income market, which increased 12.8 percent year-over-year in Q1 2017 relative to the year prior, which was attributed to strong primary placements, both in government and corporate bonds.

Additional sources of gains occurred in MOEX’s money market business, which grew 5.9 percent year-over-year in Q1 2017, as well as from its depository and settlement services, which surged 18.2 percent year-over-year in Q1 2017. This was offset by a cratering of foreign exchange (FX) fees and commissions, which fell -24.8 percent year-over-year in Q1 2017.

Key Financial Highlights

The group’s operating expenses also noted a slight uptick in Q1 2017, which included a figure of $57.0 million (RUB 3.28 billion) – this reflected an increase of 6.7 percent year-over-year from $53.5 million (RUB 3.08 billion) in Q1 2016. In light of this and other revelations, MOEX’s net profit took a tumble in Q1 2017

As such, the group reported a reading of $86.7 million (RUB 4.99 billion) in Q1 2017, down -28.4 percent from $121.2 million (RUB 6.98 billion) in Q1 2016. Its EBITDA was also pointed lower, falling by -24.7 percent in Q1 2017 relative to Q1 2016.

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