Financial Results Review

2018 was a strong year for fee and commission income, which increased by 11.5%. Fee and commission growth accelerated year-on-year and outpaced the rolling four-year CAGR. The fastest-growing business segments were Equities (+20.0%), Derivatives (+15.3%) and the Money Market (13.1%). Fees and commissions accounted for 59.3% of operating income in 2018.

Maxim Lapin, Chief Financial Officer

In 2018, the Exchange reported record fee and commission income. Fees and commissions accounted for 59% of total operating income, the highest share ever in the Exchange’s history as a public company. Net interest and other finance income Calculated as the sum of interest and other finance income, gains/losses on FVTOCI, gains/losses on AFS and foreign exchange gains less losses less interest expense. slightly decreased on the back of lower realized gains/losses from investment portfolio revaluation. As a result, MOEX’s operating income rose 3.5% YoY

The Exchange maintained its focus on cost control. Operating expenses (net of other operating expenses) increased 7.6% YoY, primarily on the back of rising amortization and amortization expenses. In early 2018, the company revised amortization schedules and reduced useful lives of certain intangible assets. As a result, the amortization expense for the year increased. Excluding this impact, operating expenses added just 5.1% YoY.

Changes in the cost Operating expenses (net of other operating expenses) excluding amortization and depreciation expenses. and revenue structure led to a further reduction in the cost-to-income ratio, underscoring that greater operating efficiency was the key driver of higher fee income, not that fee growth outstripped cost growth.

EBITDA grew by 2.6% YoY. The EBITDA margin remained strong at 72.1%. Net profit declined 2.6% YoY.

Financial highlights,
RUB mln
2014 2015 2016 2017 2018 Change 2018/2017
Operating expenses 30,394.0 45,990.0 43,567.2 38,538.9 39,901.4 3.5 %
Fee and commission income 15,586.0 17,784.0 19,797.6 21,207.6 23,647.1 11.5 %
Net interest and other finance income 14,279.4 28,084.9 23,695.0 17,285.3 16,061.0 -7.1 %
Other operating income 528.7 121.1 74.6 46.0 193.3 320.2 %
Operating Expenses (excl. other operating expenses) -10,373.3 -11,271.9 -12,259.4 -13,431.8 -14,453.7 7.6 %
Operating Profit (before other operating expenses) 20,020.8 34,718.1 31,307.8 25,107.1 25,447.7 1.4 %
EBITDA (before other operating expenses) 21,616.1 36,519.0 33,602.1 28,059.6 28,787.2 2.6 %
EBITDA margin, % 71.1 79.4 77.1 72.8 72.1 -0.7 p. p.
Other operating expenses -1,075.2
Net Profit 15,993.2 27,852.1 25,182.6 20,255.2 19,720.3 –2.6 %
Basic earnings per share, RUB 7.21 12.51 11.22 9.02 8.76 –2.8 %