Oslo Bors VPS : Børs VPS Holding 4th quarter 2017

Oslo Børs VPS Holding 4th quarter 2017

15.02.2018 08:01

Oslo Børs VPS Holding reports a profit of NOK 76 million for the fourth quarter of 2017 (NOK 74 million) and a profit of NOK 357 million (NOK 269 million) for 2017 as a whole. The Board of Oslo Børs VPS Holding intends to propose to the Annual General Meeting that a dividend of NOK 4.20 per share should be paid in respect of the 2017 financial year.

A more detailed presentation by business areas is provided in the quarterly report (enclosed).

The fourth quarter was characterised by the benchmark index reaching new all-time highs and continuing high levels of activity in the primary and secondary equity and fixed income markets.

Reported revenue for the fourth quarter of 2017 was NOK 252 million, which is NOK 18 million higher than in the fourth quarter of 2016. Revenue related to listing and registration was in total NOK 16 million higher than in the fourth quarter of 2016, NOK 1 million of which amount relates to the consolidation of NOTC with effect from the second quarter of 2017. Revenue related to the trading and settlement of equities and fixed income instruments was NOK 2 million higher than in the fourth quarter of 2016, while revenue related to trading in derivatives was NOK 2 million lower than in the fourth quarter of 2016. Revenue from the mutual funds area was in line with the fourth quarter of 2016, while revenue related to market data was NOK 1 million higher. Reported revenue for 2017 as a whole was NOK 94 million higher than in 2016, with revenue related to listing and registration NOK 82 million higher than in 2016.

Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 145 million in the fourth quarter of 2017, an increase of NOK 19 million from the fourth quarter of 2016. Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value for 2017 as a whole were NOK 43 million higher than in 2016. The increase principally relates to the financial sector tax, projects at both Oslo Børs and VPS (including MiFID 2, CSDR, share savings accounts, and modernisation projects), the appointment of a new CEO of VPS, increases in activity-dependent costs, and general increases in salaries and prices.

The Board of Oslo Børs VPS Holding intends to propose to the Annual General Meeting that a dividend of NOK 4.20 per share should be paid in respect of the 2017 financial year. This is in addition to the dividend of NOK 4.00 paid in December 2017. The dividends for 2017 will therefore together total NOK 8.20 per share, which is equivalent to 98% of earnings per share before amortisation and write-downs. The proposed dividend is conditional on proposed dividend payments by subsidiaries to Oslo Børs VPS Holding ASA being approved by the Financial Supervisory Authority of Norway.

MiFID II entered into force on 3 January 2018. The proportion of market trading taking place on traditional stock exchanges has increased. Oslo Børs is no exception to this, and in
January 2018 it had a market share of trading in OBX shares of approximately 63%, up from approximately 58% in both January 2017 and 2017 as a whole. Equity trading in European dark pools has decreased by around 15%.

The environment in which the group operates is seeing extensive changes of a technological, competitive and regulatory nature. The securities market is seeing increasing levels of interest and use. This is particularly the case in relation to the savings and pension markets.

On the basis of the current picture, the Board has decided on a strategy of organic growth for Oslo Børs, with a target of achieving growth in both the Norwegian and international markets. Oslo Børs will progress its strategy by concentrating on important sectors in the Norwegian securities market as well as by developing and selling value-adding services. Oslo Børs is well-positioned to compete in this market.

In 2018 the Board will particularly focus on its strategy for VPS. This will include considering how best to position this company for further growth in light of the changes in the regulatory framework caused by the introduction of CSDR.

The Board has also considered the group's capital structure. During the first six months of 2018 the Board will increase the amount of interest-bearing debt held by Oslo Børs VPS Holding ASA by around NOK 450 million (i.e. by an amount approximately equivalent to the group's
average annual EBITDA over the last three years), with a payment then subsequently made to shareholders.

The group's operating revenue varies in line with the level of activity in the securities market. Oslo Børs VPS is committed to offering a range of products and a pricing structure that are competitive and that encourage active use of the group's services. Oslo Børs VPS anticipates that its marketplace activities will continue to face intense competition, and it also expects increasing competition for the group's post-trade activities.

For further information, please contact:
CFO Geir Heggem, tel. [phone]
SVP Corporate Communications Per Eikrem, tel. [phone]

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