Moscow Exchange Delivers Continued Strong Trading Performance for Q3 2023 with YoY Growth Across All Markets

Moscow Exchange (MOEX), the largest exchange group in Russia, today announces its financial results based on summary financial statements prepared in accordance with International Financial Reporting Standards (IFRS) for Q3 2023.

Unless stated otherwise, all figures below refer to performance in Q3 2023 and all comparisons are with the corresponding period last year.

Financial Overview for Q3 2023

• Operating income totaled RUB 25.60 billion for the quarter, 41.0% higher than RUB 18.16 billion in Q3 2022 and 22.5% higher than RUB 20.90 billion in Q2 2023. Among them, fee and commission income contributed the most to the yearly increase, rising by 60.9% from RUB 8.93 billion in Q3 2022 to RUB 14.37 billion this quarter. Net interest and other finance income (NII) accounted for RUB 11.21 billion with a yearly increase of 21.8%, while core NII (NII less realized gains or losses on investment portfolio revaluation) accounted for RUB 11.47 billion with a yearly increase of 23.8%. other operating income was RUB 22.5 million, down 13.1% compared to RUB 25.9 million in the same period of last year.

• Operating expenses reached RUB 7.42 billion for the period, increasing 37.7% compared to RUB 5.39 billion in the year-ago quarter and increasing 25.7% compared to RUB 5.91 billion in the prior quarter.

• Profit before tax came in at RUB 18.18 billion, jumping 42.3% compared to RUB 12.77 billion in the Q3 of last year and increasing 21.3% compared to RUB 14.99 billion in Q2 this year.

• Net profit amounted to RUB 14.28 billion for the three months, soaring 63.9% compared to RUB 8.71 billion in the same period of 2022 and increasing 17.9% compared to RUB 12.11 billion in the prior quarter. Basic earnings per share (EPS) stood at RUB 6.32 in this quarter, up 63.7% compared to RUB 3.86 in Q3 2022 and up 17.7% compared to RUB5.37 in Q2 2023.

• Adjusted EBITDA was RUB 19.37 billion with margin of 75.7% for the quarter, compared with RUB 13.88 billion with margin of 76.4% in the same quarter a year ago and RUB 16.21 billion with 77.6% in the prior quarter.

Performance for Key Business Lines for Q3 2023

• The total market capitalization of the Equities Market at the end of the third quarter was RUB 57.74 trln (USD 592.68 bln). Fee and commission income from the Equities Market quadrupled. Volumes increased by 2.5 times as trading velocity went up. Over 3 million clients were active every month during the quarter.

• Fees and commissions from the Bond Market grew 73.9%. Trading volumes (excluding overnight bonds) were up 71.5%. Primary market was active despite volatile interest rate environment. Secondary trading volumes increased by 37.4%. Secondary trading of OFZ & OBR was up 30.2%; other bonds' volumes were up 48.5%.

• Money Market fee income improved by 53.9% as trading volumes added 45.5%. The discrepancy between fees and volumes dynamics was mainly attributable to an increase of value-added GCC repo share in total trading volumes' mix.

• Fee income from the FX Market grew 34.6% while trading volumes were up 62.4%. The effective fee dynamics is influenced by the 2 oppositely directed effects: the tariff structure favoring liquidity makers on the spot market that came into effect on the 1st of August 2022, a shift in the trading volumes' mix towards less profitable swap segment. Spot trading volumes increased by 23.6%, while swap volumes gained 91.2%.

• Derivatives Market fee income grew by 74.2%, while trading volumes were up 51.3%. Volumes' mix changed towards higher value-added derivative contracts based on commodities, single stocks and interest rates. Specifically, commodity derivatives' volumes surged 3.4x while single-stock derivatives volumes increased by 85.3%. Volumes of interest rate contracts surged 5.3x YoY amidst volatile interest rate environment. The effective fee was also affected by the 5x decrease in options trading fee in April 2023.

• Other fee and commission income increased by 17.2%. Information sales were up 46.8%, largely due to RUB depreciation. Sales of software and technical services increased by 33.2%, driven by tariffs revision and the introduction of low-latency protocols for market data distribution – SIMBA ASTS and FIFO TWIME ASTS – to Equities and FX Markets. Sales of software and technical services were also supported by the elevated demand for colocation and advanced network access solutions. Listing and other services increased by 13.5% as activity on the primary bond market remained strong during the quarter. Finuslugi marketplace revenue nearly tripled to RUB 456.4 mln with deposit and loan segments performing particularly well. Other fee income decreased 71.9% since the base period included fees on FX client balances.

• The cash position at the end of Q3 2023 was RUB 117.73 bln. The company had no debt as of the end of the quarter.

• Capex for the quarter was RUB 0.68 bln, mostly spent on purchases of software and equipment as well as software development.