Euronext's core profit stable on lower costs

Euronext said its full-year core earnings stood stable, as the pan-European exchange group's reduced costs offset a drop in listing and trading volumes that it blamed on uncertainty following Britain's vote to leave the European Union.

The bourse operator said total capital raised in primary activity fell to 3.73 billion euros ($3.95 billion) from 28 new listings, against 12.40 billion euros a year earlier from 52 listings. 

Trading activity for the year was "marked by lower volumes," the company said, citing reduced investor confidence post-Brexit and lower volatility.

Seasonally low levels of volume in cash and derivatives markets were further hurt in July and August as a result of the June 23 referendum, which saw volatility drop to 12-month lows after a brief spike in the final days of June, Euronext said in November.

The bourse operator has been vocal in warning its investors over falling listings and reduced trading activity and has turned to making itself a leaner company to compensate.

Euronext last year unveiled a new strategic plan and said it would improve technology, cut costs and aim to grow sales at its core business by 2 percent a year for the next three years.

On Wednesday, the company said it had achieved about 70 per cent of its cost reductions that were targeted.

Euronext, which has agreed to buy London Stock Exchange Group's French clearing business for 510 million euros, said earnings before interest, tax, depreciation and amortisation (EBITDA) were stable at 283.9 million euros for 2016.

Analysts on average had expected EBITDA of 276.6 million euros, according to Thomson Reuters I/B/E/S.

The company, which operates bourses in Paris, Amsterdam, Brussels, London and Lisbon, said third-party revenue fell to 496.4 million euros from 518.5 million euros in the year.

Operating expenses for the year fell 9.4 per cent to 212.5 million euros from 234.7 million euros a year earlier.

The company's EBITDA margin rose to 57.2 per cent, up from 54.7 per cent a year ago.

Source :Times Of Oman