Euronext reports higher revenue, volumes for FX franchise

abdelaziz Fathi

Euronext, which operates the biggest pan-European exchange, said its third-quarter revenues were virtually unchanged from a year earlier.

The exchange operator attributed the results to stable performance in listing and post-trade businesses, as well as contribution of the Borsa Italiana.

Trading revenue in Q3 2022 was lower by 6 percent on a yearly basis to €118 million, primarily driven by lower cash equity and MTS Cash volumes. The drop was partially offset by yield management and strong quarters for FX, derivatives and power trading.

Meanwhile, post-trade revenue grew 3.7 percent to €86.2 million thanks to the strong performance of the clearing activities of its Italian units. In addition, custody and settlement revenue scored a mild increase to €57.1 million even though the Nordic CSDs was less dynamic reflecting notably normalised levels of retail activity.

Net treasury income for Euronext Clearing was -€38.3 million, including -€49.0 million of non-underlying pre-tax loss following the partial disposal of its clearing portfolio.

Euronext said the transaction with the Milan-based stock exchange helped diversify its business mix into new asset classes, and strengthened its post-trade activities. In addition, it gave the exchange a clearinghouse for the first time, as well as a securities depository and bond platform.

Other business highlights show that non-volume related revenue accounted for 59 percent of the group’s total revenue in Q3 2022, virtually unchanged from a year earlier, reflecting a solid quarter for non-volume related business.

The pan-European exchange posted €199 million in Q3 EBITDA, helping it earn a less-than-expected €129 million in profit for the period, which was lower 5.5 and 3.2 percent, respectively.

On the FX business front, Euronext reported an average daily volume on its spot foreign exchange market at $21.7 billion for the Q3 2022, up 24 percent compared to $17.5 billion a year ago. The spot foreign exchange division yielded €7.3 million in revenues, up from €5.6 million in Q3 2021, reflecting higher trading volumes as FX markets recorded heightened volatility through the quarter.

Commenting on the results, Stéphane Boujnah, CEO and Chairman of Euronext, said “This third quarter of 2022 demonstrated the robustness of Euronext’s diversified business model in a more challenging trading environment. We recorded strong growth in our non-volume related activities, as well as good performance of derivatives, FX and power trading activities. Euronext confirmed its position as the main trading venue in Europe this quarter, providing market participants with the highest market quality and depth. Combined with continued cost discipline, in line with our 2022 cost guidance, this led to robust adjusted EBITDA and adjusted net income.”

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