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Record Revenues for the GPW Capital Group in the First Quarter of 2024

INVESTINGRecord Revenues for the GPW Capital Group in the First Quarter of 2024

In the first quarter of 2024, the Warsaw Stock Exchange Capital Group achieved record sales revenues of PLN 118.2 million, an increase of 5.3% year-on-year. Net profit1 increased by 2.1% year-on-year to PLN 27.2 million, despite an 8.8% decline in EBITDA to PLN 31.8 million. The Warsaw market maintains a strong position in Europe, ranking among the highest in terms of growth in session trading values and third in turnover ratio, according to FESE data for Q1 2024. GPW indices also recorded significant growth since the beginning of the year, reaching historical highs.

  • PLN 118.2 million – record quarterly sales revenues for the GPW Capital Group (+5.3% y/y)
  • PLN 31.8 million – EBITDA in the first quarter of 2024 (-8.8% y/y)
  • PLN 27.2 million – net profit1 in the first quarter of 2024 (+2.1% y/y)
  • 30% – increase in the WIG index since mid-October 2023

Record Performance in the Cash Market

In the first quarter of 2024, the Polish capital market continued its upward trend. Rising indices were accompanied by significant increases in trading volume. According to data from the Federation of European Securities Exchanges (FESE), session trading on the Main Market in the first quarter of this year reached PLN 82.7 billion, an 18.4% year-on-year increase, one of the highest in Europe. The Warsaw Stock Exchange also ranked third in Europe in terms of liquidity, with a turnover velocity of 39%. Investor activity remained high in April, with equity trading on the Main Market reaching PLN 31.1 billion, a 78.5% increase compared to April of the previous year.

TOMASZ BARDZIŁOWSKI, CEO OF GPW (WARSAW STOCK EXCHANGE)
Tomasz Bardziłowski, CEO of GPW (Warsaw Stock Exchange)

The last seven months have been very good for the Warsaw Stock Exchange. High trading volumes are accompanied by historic index increases. Since mid-October 2023, the broad-market WIG index and the large-cap WIG20 index have gained over 30%. These are among the best results worldwide – calculates Tomasz Bardziłowski, CEO of GPW.

In the first quarter of 2024, the Warsaw Stock Exchange Capital Group (GK GPW) achieved revenues of PLN 118.2 million, an increase of 5.3% year-on-year. Revenues from the financial market increased by 11.6% year-on-year to PLN 74.2 million, while the commodity market saw a revenue decline of 4.2% year-on-year to PLN 39.6 million. Revenues from the sale of financial and commodity market information were the highest in the Group’s history, amounting to PLN 15.8 million.

Despite the record revenue increase, the EBITDA of the GPW Capital Group after three months of 2024 was PLN 31.8 million, a decline of 8.8% compared to the first three months of the previous year. Net profit attributable to the shareholders of the parent company in the first quarter was PLN 27.2 million, an increase of 2.1% year-on-year.

1 Net profit attributable to the shareholders of the parent company increased compared to the previous year. Operating expenses rose by 9.5% year-on-year to PLN 94.4 million. As in previous years, the Group established a provision for annual capital market supervision fees in the first quarter of 2024, amounting to PLN 15.65 million, PLN 0.2 million more than the previous year.

The cash market saw another quarter of development in the ETF offering, reflecting growing investor interest in these products. ETF trading on GPW reached a record value of PLN 370 million, up 21.4% year-on-year. The most popular derivative instrument on GPW, the WIG20 futures contract, recorded a 1.7% increase in trading volume to 2.32 million units, despite significantly lower volatility in the underlying index.

The Warsaw Stock Exchange continues to expand its financial instrument offering for investors. In the first quarter of this year, new futures contracts on shares of four companies: AmRest, PKP Cargo, Asbis, and Auto Partner, were added to the derivatives offering. Additionally, at the end of March, a new type of structured instrument – option warrants – was introduced. These are warrants on the shares of nine Polish companies listed on GPW and three indices: WIG20, mWIG40, and DAX.

For several weeks, the GPW Capital Group has been intensively reviewing its strategic initiatives in terms of their economic potential, as well as financial and operational risk. This process also includes initiatives related to cost optimization.

WATS – A Key GPW Project

In April 2024, the GPW Supervisory Board appointed Sławomir Panasiuk as Vice-President of the Management Board responsible for the IT and technology area. Under his leadership, the Exchange plans not only the effective implementation of the new trading system but also the enhancement of cybersecurity and adaptation to new technological trends, essential for ensuring the security and efficiency of capital market operations. Sławomir Panasiuk will assume his role upon obtaining approval from the Polish Financial Supervision Authority.

We welcome the announcement of the competition for the position of a board member responsible for IT matters. We are also pleased to have established the GPW WATS System Implementation Committee with industry representatives, which has developed a new implementation schedule. Despite significant delays, our priority is to ensure trading security and thoroughly test the new system – emphasizes Tomasz Bardziłowski.

New TGE Management Board

In May this year, the Extraordinary General Meeting of TGE entrusted Piotr Listwon, the current Vice-President for operations, with the role of President of the Management Board for another term. The TGE Supervisory Board also decided that Jarosław Ziębiec would continue as Vice-President for business development in the new term. Additionally, Mariusz Buraczyński was appointed as Vice-President for operations, subject to approval by the Polish Financial Supervision Authority. The appointment of the President and members of the TGE Management Board followed a competitive process.

From January to March 2024, the Warsaw Commodity Exchange Capital Group (GK TGE) recorded a 7.4% decrease in electricity trading volumes to 32.1 TWh and a 16.5% decrease in natural gas trading volumes to 34.0 TWh. There were also declines in the volume of property rights for electricity generated from renewable energy sources, which fell by 21.5% year-on-year, reaching 4.1 TWh.

Regulatory Changes at the EU Level

As a key institution in the Polish capital market, the Warsaw Stock Exchange closely follows upcoming regulatory changes at the European Union level. In April this year, the European Parliament adopted a draft regulation introducing significant changes to regulations aimed at preventing market abuse and public share issuance regulations. The Listing Act aims to increase the attractiveness of public capital markets for companies and facilitate capital access for small and medium-sized enterprises. One of the key changes is raising the threshold for exemption from the requirement to prepare a prospectus for listing securities from the current 20% to 30% within 12 months and exempting issuers whose shares of the same type have been listed on a regulated market for at least 18 months from this requirement.

We positively assess the key changes introduced under the Listing Act, primarily the expansion of the issuance catalogue. We hope that the liberalization of prospectus requirements will significantly contribute to increasing the scale of capital acquisition by companies listed on GPW – adds Tomasz Bardziłowski, CEO of GPW.

GPW plans to actively participate in consultations on the Capital Markets Union (CMU) concept. Although the CMU topic has gained increasing interest among EU policymakers and its importance for mobilizing European savings for purposes such as the energy transition is emphasized, this process has faced numerous challenges over the years. Poland, with significantly lower market capitalization of listed companies compared to larger markets, faces additional difficulties in the context of a single capital market. Further discussion on the shape of the Capital Markets Union requires participants to find an appropriate balance between pan-European integration and maintaining the ability of local exchanges to efficiently raise capital, especially for small and medium-sized enterprises.

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