Hellenic Exchanges will release its FY/Q4 2014e group results on March 16, 2015, post market hours and host a conference call the same day at 18:30 (Athens Time), 16:30 (London), 11:30 (New York).
We see 2014e group sales, EBITDA and net profit down 43%, 53% and 31% y-o-y to EUR47.8m, EUR28.2m and EUR22.2m, respectively. This 2014 earnings downtrend mirrors a massive drop in non-transactions revenues (-66% y-o-y to EUR20.6m), which more than offsets upbeat equity business (+51% y-o-y to EUR20.7m) as average daily turnover (ADT) jumped 61% y-o-y to EUR127m from EUR79m in 2013.
Recall that 2013 revenue were boosted by:
¡ Rights issues fees of EUR30.7m linked to Greek banks unusually high capital raisings (first recap phase)
¡ Off-exchange settlement income of EUR10.8m (CC Hellenic relisting).
¡ In Q4, group sales should fall 12% y-o-y to EUR11.7m, driven by a 19% drop in equity business to EUR4.6m. This, in turn, reflects a 20% decline in ADT to EUR110m on the back of less favorable y-o-y comparisons. That said, ASE trading activity picked up momentum in 4Q13, averaging EUR138m per day, 110% above 9M13 levels of EUR66m. As such, Q4 2014 cash market (trading/clearing) income should make up 40% of group total (vs 44% in 9M14 and 17% in FY13). Reversing previous quarter’s negative trend, Q4 derivatives revenue should advance 15% y-o-y to EUR1.2m (-4% y-o-y in 9M14), contributing 11% of group total. In the same vein, we look for a growth of 22% y-o-y to EUR1.5m in depository services income.
¡ On the flip side, we expect Q4 exchange services (rights issues fees, membership subscriptions, IPOs) and settlements revenue to fall 41% and 42% y-o-y to EUR1.1m and EUR0.5m, respectively, making up 10% and 4% of Q4 total. In turn, depository, market data (data feed), revenue from re-invoiced expenses, X-Net, clearinghouse and IT services should represent 13%, 8%, 3%, 2%, 1% and 1% of Q4 total, on our estimates.
¡ We forecast Q4 total operating expenses up 3% y-o-y to EUR4.6m, but down 9% y-o-y on a recurring basis thanks to a 6% drop in staff costs to EUR2.5m (53.1% of group opex). Further down the P&L, Q4 2014 group recurring EBITDA is seen 16% y-o-y lower at EUR6.5m compared with EUR8.5m a year ago.
¡ Likewise, we expect group EBIT and EBT to decline 22% and 21% y-o-y to EUR6.1m and EUR7m (the latter aided by EUR0.9m net financial income), respectively.
¡ Finally, we look for Q4 group net earnings of EUR5m vs net losses of EUR8.2m over the same period last year. Note that Q4 2013 bottom-line was hit by EUR13m extra tax payment (19% on EUR69m tax free reserves).
¡ End-December 2014 net cash position should settle at EUR152m (c42% of market cap) vs EUR163m a year earlier.
¡ GR 00800 4413 1378,
¡ UK 0800 953 0329,
¡ US +1 866 819 7111,
¡ Other international participants +44 1452 542 301
|EBITDA Mrg||74,3%||59,0%||-1.530 bps||61,4%||56,1%||-537 bps|
|Net Mrg||39,6%||46,5%||+686 bps||-61,4%||42,8%||n.a.|