BM&FBOVESPA S.A. (BVMF3) today reported fourth quarter earnings ending December 30, 2011.
New strategic areas such as Securities Lending, Tesouro Direto, ETFs and High Frequency Trading (HFT) performed well in the quarter. Successful implementation of the derivatives and spot FX modules of the PUMA Trading System and forward momentum on the multi-asset integrated clearing system further boosted the Company's technological edge.
BM&FBOVESPA announced an adjusted expense budget range of R$580 million to R$590 million and a capital expenditure budget range of R$230 million to R$260 million for 2012. The adjusted Opex range equals the range for 2011 as a result of the Company's cost-cutting improvements.
"We remain focused on capturing the growth opportunities offered by the Brazilian market," said BM&FBOVESPA Chief Executive Officer Edemir Pinto. "The execution of our investment program to strengthen our IT infrastructure and the launching and development of products and markets, such as ETFs, HFTs and options on single stocks, are aligned with this goal. We are also taking actions to strengthen market supervision, which will help make the Brazilian market more attractive to investors. Mr. Pinto added, "We highly welcome the government's decision to remove an IOF tax on equity investments by non-residents".
During 4Q11, net revenues were almost flat year-over-year. This reflected a decline in trading volumes which was offset by a 39.5% increase in other revenues. Expenses were higher as a result of a one-time extraordinary transfer of restricted funds to strengthen the BM&FBOVESPA Market Supervision (BSM) while adjusted expenses were well in line with the Company's announced budget range. Adjusted EBITDA margin was relatively stable at 65.2% compared to 66.5% in 4Q10. Adjusted net income per share declined by 1.0% year-over-year.
Other operating and financial highlights:
• 107.1% year-over-year growth in the Average Daily Trading Value (ADTV) of Exchange Traded Funds (ETFs); 61.1% rise in assets under custody of Tesouro Direto; 56.8% increasease in the open interest of securities lending.
• 79.8% increase in the Average Daily Trading Volume (ADV) of stock indices contracts and 69.0% growth in the ADV of mini contracts in BM&F segment.
• Strong momentum on delivering the next modules of the PUMA trading system, building the new integrated clearinghouse and developing an OTC platform.
• Recommendation of R$226.7 million in dividends, amounting to R$912.3 million in 2011.
Chief Financial and Investor Relations Officer, Eduardo Refinetti Guardia, said: "Our strong focus on cost control throughout 2011 enabled us to reduce the level of expenses during the year. For 2012, the same strict controls will be maintained so we can keep costs at the same level. We also reinforced our commitment with returning cash to our shareholders."
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