The exchange operator earned more in the second quarter than analysts had expected.
(Photo: Reuters)
Frankfurt Few companies are currently benefiting from inflation and the volatile market – but the uncertain economy is bringing in increased profits for Deutsche Börse thanks to the high level of trading activity on the markets.
The profit attributable to the shareholders rose to 341.1 million euros in the second quarter, the stock exchange operator announced on Tuesday evening. That was an increase of ten percent compared to the same period last year and exceeded the forecasts. Analysts had expected growth of 5.9 percent on average.
“Inflation, interest rates, volatility – the environment on the financial markets continues to be characterized by a high level of uncertainty,” said CFO Gregor Pottmeyer, explaining the quarterly results. The company wrote in its semi-annual report that the geopolitical risks, rising inflation and interest rate hikes have led to high trading activity across all asset classes. The trading and clearing business in particular benefited from this economic situation. Securities Services saw an increase in net interest income from banking activities.
“In addition to strong structural growth, the rising interest rate environment in particular is having an increasingly positive effect on our net revenue,” said the Deutsche Börse CFO. Net revenue increased accordingly in the second quarter by 15 percent to 1.017 billion euros.
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Cyclical factors driving revenues also included increased volumes in interest rate derivatives and gas products. In addition, Deutsche Börse is said to have gained new customers in the ESG area. ESG stands for environmental, social and corporate governance criteria when evaluating financial products.
“Volatility remains high in most asset classes”
Not only the profits increased at the largest German stock exchange operator: the operating costs also increased by 13 percent compared to the same period last year to 432.1 million euros. Earnings per share thus amounted to EUR 1.86.
“We assume that the volatility in most asset classes will remain high and that the cyclical tailwind will therefore be an additional growth engine for our companies,” said CFO Pottmeyer about the prospects for the coming months.
Due to the strong second quarter, Deutsche Börse is increasing its forecast for the current year: the stock exchange operator now expects net revenue to rise to well over EUR 3.8 billion. Earnings before interest, taxes, depreciation and amortization (Ebitda) are expected to increase to well over EUR 2.2 billion.
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