Euronext registers 11.4% Y/Y drop in revenues in Q3 2023
Pan-European market infrastructure Euronext today published its results for the third quarter of 2023.
FX trading reported €6.4 million of revenue in Q3 2023, down 11.4% from the year-ago quarter reflecting negative volume mix impacts and the year-on-year depreciation of the USD, which offset higher volumes.
Over the third quarter of 2023, average daily volumes of USD23.2 billion were recorded, up 7.0% compared to Q3 2022, resulting from an uptick in volatility.
On a like-for-like basis at constant currencies, FX trading revenue was down 4.4% in Q3 2023 compared to Q3 2022.
Derivatives trading revenue decreased by 3.9% from a year earlier to €13.4 million in Q3 2023, as equity and index futures were down compared to a particularly volatile Q3 2022, partially offset by the continued strong performance of Euronext commodity derivatives supporting good revenue capture.
Across all segments, in Q3 2023, Euronext underlying consolidated revenue and income amounted to €360.2 million, up 2.8% compared to Q3 2022, driven by the robust performance of non-volume-related activities and solid trading revenue driven by strong performances of fixed income and power trading, more than offsetting a low volatility environment for cash and derivatives trading, and negative FX rate variation impacts. In addition, transitional revenue was negatively impacted by a non-recurring credit note.
On a reported basis, total revenue and income was up 19.5%, reflecting notably the positive comparison base of the non-underlying one-off loss of €49.0 million in net treasury income in Q3 2022 related to the partial disposal of the Euronext Clearing investment portfolio.
Adjusted operating profit was €195.4 million, a 6.3% increase compared to Q3 2022.
Net financing income for Q3 2023 was €1.5 million, compared to a net financing expense of €4.6 million in Q3 2022. This decrease reflects higher interest income from cash held offsetting the cost of issued debt.
Results from equity investments amounted to €54.4 million in Q3 2023, resulting from a dividend received from Euroclear and from a €41.6 million tax-exempted non-underlying capital gain in relation to the disposal of Euronext’s 11.1% stake in LCH SA. As a reminder, following this disposal the Group will not record any contribution from LCH SA from Q3 2023 in results from equity investments.
Income tax for Q3 2023 was €48.4 million. This translated into an effective tax rate of 22.0% for the quarter, primarily reflecting the positive impact of the tax-exempted one-off capital gain from the disposal of the LCH SA stake (Q3 2022: €27.9 million and 26.2% respectively).
Share of non-controlling interests mainly relating to the Borsa Italiana Group and Nord Pool amounted to -€5.6 million in Q3 2023.
Consequently, the reported net income, share of the parent company shareholders, increased by +119.6% for Q3 2023 compared to Q3 2022, to €166.5 million. This represents a reported EPS of €1.57 basic and €1.56 fully diluted in Q3 2023, compared to €0.71 basic and €0.71 fully diluted in Q3 2022.