Bursa de Valori Bucuresti SA (BVB) Earnings Call Transcript & Summary

In just a few moments, we will also share the presentation that we have prepared for these financial results. Thank you very much, Cristina. If we can go to the first slide. Perfect. I will start first with the Bucharest Stock Exchange share price. At the end of June, it is sitting at RON 37.9. Over a period of 5 years, it is up 73%. However, it's still underperforming the main market index, the BET index. In terms of our shareholding structure for the second quarter of 2025, we have a stable shareholding structure with very little changes. As you may know, our shareholding structure is composed, the majority 77% of Romanian institutional investors and also Romanian private investors with 20%. You will see on this slide also our significant investors. Of course, we thank for the support of all our shareholders, which is, of course, very much appreciated. In terms of the number of shareholders, we are close to 7,000 shareholders, slightly below the previous quarter, just 1% down. Now if we can go to the second slide. Thank you. As Remus mentioned, starting the 1st of July, Remus is now the CEO of Bucharest Stock Exchange. In terms of our trading activity, we had a strong quarter in terms of liquidity, RON 10 billion, which is up 11% compared to the previous year, the previous period of this -- actually the same period of the previous year. In terms of new offers, new issues that we had on the market, we had 3 series of Fidelis bonds accumulating a value of RON 4.1 billion, which is up 28% compared to the previous year. We also had the issue of the Bucharest City Hall municipal bonds with a value of approximately RON 0.5 billion. Another development that happened for the market, and we also welcomed it is MSCI, which is a global index provider, has classified the Romanian capital market as an Advanced Frontier Market. This happened following the introduction of this subcategory at the 2025 June annual review. This has been very welcomed by the market. We have a lot of coverage in the social media as well as good feedback from the investors following this. In terms of the main market index, following the volatile quarter, which also supported our trading activity, which is the main market index ended the quarter with a positive return of 12% year-to-date with a strong positive sentiment following the Romanian presidential elections. Looking at the next quarter, what we have actually already seen in the market is the voluntary takeover for Purcari Wineries, which is a significant offer and also will have a significant impact on our financial results. The main market index is up and also making consecutive highs as we have seen these days in robust trading activity. The trading activity is quite large compared to the same period of the previous year. Also, what we can say is that the Ministry of Finance will continue the Fidelis bonds on monthly basis. There's another aspect that we would like to highlight, and I believe there will be more details in the presentation. It's about the status of the CCP.RO. The Board of Directors of CCP.RO sent several convenes for the organization of the General Shareholders' Meeting of CCP.RO for the approval of an updated business plan, a reduction in the share capital with the losses recorded by the CCP of amount RON 26.94 million and for a new increase of the share capital of RON 27.9 million. And the next slide will also offer some charts in terms -- the next slide, yes, we will offer some charts in terms of our trading activity. If we look at equity-like instruments, shares, rights, unit, certificates and includes also offers, as you can see, the second quarter of 2025 has been robust compared to the previous quarter. If we look at the same period of the previous year, however, the trading activity is down 17%. However, if we look at the main market and only regular trades, we can see that the trading activity also compared to the same period of the previous year, has been increasing with 4%. What we would also like to highlight is the trading value in the fixed-income instruments, which is the chart from bottom left. The trading activity compared to the previous -- to the same period of the previous year has been increasing RON 4.75 billion, which is up 36% compared to the previous year, yes. I would like now to kindly invite Virgil Stroia, our CFO, to present the highlights of our financials.

Thank you, Alex. So regarding our financials, we have here in this slide presentation of the second quarter 2025 comparison with 2024. On the left side, we have the [indiscernible] comparison for the consolidated figures. So as you can see, we have now 4% lower revenues -- operating revenues compared to 2024. As mentioned in the report it is -- we had the weaker secondary market trading activity that influenced the consolidated operating revenues. We have operating expenses higher with 19% compared to 2004 (sic) [ 2024 ] and here we can say and you will have more details in our analysis regarding the CCP expenses, which increased significant in 2005 (sic) [ 2025 ] compared to 2004 (sic) [2024 ] and influenced the results starting with first quarter in 2005 (sic) [ 2025]. We recorded much lower operating profit in the second quarter 2005 (sic) [ 2025 ] almost RON 1 million compared to RON 4.7 million in 2004 (sic) [ 2024]. And the much [indiscernible] net profit has mainly influenced by the increase in -- significant increase in the expenses. Regarding the standalone figures at [indiscernible] here, decrease in revenues is higher compared to the consolidated level. As mentioned, the trading activity which are generating the main revenues are recovering in the second quarter, but there is still room for improvement and increase. We had 8% increase under operating expenses, mainly due to the personnel cost increase. Back in 2024, we increased our team and this impact we can see now in 2005 (sic) [ 2025]. We recorded now operating profit influenced by the decrease in revenues and increase in expenses of RON 2.3 million compared to RON 4 million in the same quarter in 2024, and net profit of RON 3 million compared to RON 6.8 million in 2004 (sic) [ 2024 ] year. We were influenced by recording of new impairment for our CCP investment according to international accounting standards. We are making an evaluation of our investments at each issue of the financial statements. So given the information received from our subsidiary, we recorded an additional RON 3.5 million [indiscernible].

On the next slide, just a quick comment if you allow. So we are, in fact, coming back for the trading activities better than expected after the turmoil at the end of 2024 on the collections background and we do have stability anchor in the post-trading in the [ center ] CSDR. Our CSD is actually helping mitigate the downsize of the trading -- yes, of the trading decrease. On the third quarter, I believe the results will show this trend of improvement in trading, volumes and the dynamics, and also what Virgil mentioned is worth highlighting again, we are recording in a prudent manner the investment in the central counterparty. As of December 31, 2024, we have recorded the first depreciation ever on the investment made by the Bucharest Stock Exchange in the central counterparty project. We have followed up with another 2 depreciations recorded at Q1 and Q2. So that's where the negative impact in the standalone and consolidated bottom lines come from. Back to you, Virgil. Thank you.

On the next slide, we have the main figures for the first 6 months 2025 and the comparison with 2024. And here we can see in the overall standalone that was decrease in the operating revenue as mentioned before. We saw what happened in the second quarter in 2005 (sic ) [ 2025]. We had on a similar -- on a similar level operating expenses over 2024 for the 6 months, due to the decrease in revenues operating profit also decreased to RON 3.5 million from the non-operating margin. We are better higher net financial revenue of RON 4.3 million as [indiscernible] recorded the dividend from the Central Depository, which helped us to have a [indiscernible]. We had impairment on as mentioned for the 6 months of almost RON 3.6 million [indiscernible] and profit before tax of RON 1.2 million and very low profit for the period of RON 660,000. I will give the floor to my colleague, Cristina to tell more about the figures.

Thank you, Virgil. So at company [indiscernible] the operating revenues as of the first half of 2025 are an amount of RON 37 million, slight decrease of 4% compared with previous year during -- by the lower trading segment revenues while revenues from the post-trading and registry segment increased by 8% reaching almost RON 20 million. Regarding operating expenses at Group level, they are in amount of RON 37.7 million, 19% increase and they are mainly generated by the increase recorded on the subsidiary CCP.RO, which are higher by RON 10 million and they are representing mainly technology services and personnel costs. We will detail more on them on the next slide. Operating result at the group level is a loss of almost RON 500,000 significant lower with -- compared with profit recorded in first half of 2024 and is mainly generated by the significant expenses recorded by CCP.RO. Financial result is over RON 2 million, decrease of 24% year-on-year and it s mainly influenced by the decrease in interest income recorded and also by the increase in the estimated [indiscernible] expected credit losses provisions. Net result at Group level is a profit of RON 1.5 million. Regarding the consolidated revenues by segment, trading segment represents share is decreasing from 52% to 47% in Q1 2025 and the trading revenue represents the most part of it which is 68%. Post-trading & registry segments represented by the Local Central Depository [indiscernible] represents 53% of Group operating segment. Post-trading segment has a highest operating margin, which is 40%, 2% increase compared with previous period reaching RON 12.8 million in revenues. Registry segment also recorded an increase of 12% up to RON 6.7 million. Regarding the operating expenses as of [indiscernible], we recorded a similar level of operating expenses compared with previous year. The increase in personnel expenses covered roughly of the decrease in other operating expenses and this has as you mentioned the personnel expenses still increase is mostly due to the increasing FTEs compared with the previous year, and also to the annual indexation [indiscernible]. And then, I also mentioned the decrease in operating expenses of 16% is based on the one-off expenses recorded in previous year regarding the allocation of the headquarters -- BVB headquarters but also due to lower marketing and promotion expenses compared with previous year. Regarding the consolidated operating expenses, the increase by 19% is mostly to as already mentioned to CCP expenses, new expenses recorded in the [ operating ] process mainly third-party services of RON 3 million representing management services of the compensation system, audits, and analyzes for DORA compliance, but also to the RON 2 million depreciation expenses recorded for the technological infrastructure and software license. The increase of 90% of the consolidated expenses is already is -- also due to the increase in consolidated personnel records at Group level, due to increase in FTEs coming from CCP.RO and BVB, but also to the annual adjustment approved at Group level. A few highlights on the financial position at the end of June at BVB level, the decrease in noncurrent assets is mainly determined by the additional impairment recorded by BVB for the participation in CCP.RO of RON 6.6 million. Also regarding current assets are up 19% up to almost RON 28 million and this is due to the recognition of the dividends receivable from Central Depository and also reclass of current portion of financial investments. At the BVB Group level, the consolidated non-financial assets are of RON 115 million, slightly similar level compared with previous periods. And main the violation come from the intangible assets increased from CCP.RO, representing for software license. And IT replacements made for infrastructure. Current assets are up 15%, up to RON 143 million and are influenced by higher restricted assets following the increase in variable contribution at DC, but also due to changes in the current portion of financial investments. The consolidated liabilities at the end of -- for the first half 2025 are up 29% to RON 77 million and had influenced mainly from -- by higher current liabilities, representing services accruals from CCP, but also by the increase in variable contributions, which are also presented as current assets in the balance sheet. So that's it from me. If you have any questions for us?

[indiscernible]. Are there any questions. If none, [indiscernible].

[Foreign Language].