BM&FBOVESPA S.A. (BVMF3) today reported first quarter earnings, ending March 31, 2011. Performance in derivatives was driven by robust growth in interest-rate contract volumes, while equities posted double-digit growth in HFT and ETF volumes as these new products continue to gain traction. Adjusted operating expenses[1] for the quarter are in line with the budget guidance range for the year as presented to the market, and declined 11.6% compared to 4Q10.
- 1Q11 net revenue of R$472.2 million increased by 2.5% year-over-year;
- Adjusted net income[2] was R$384.2 million (adjusted EPS of R$0.196), compared to R$405.1 million for 1Q10, as a result of planned increases in operating expenses for new strategic growth initiatives;
- Average daily trading (purchases + sales) by high frequency traders in the Bovespa segment increased by 52.3% following the introduction of a new pricing policy in November 2010, (representing 6.1% of the total value traded);
- ETF trading continued to grow, with average daily trading volume reaching R$39.5 million, up 59% from 1Q10;
- Payment of R$100.0 million in interest on capital and R$66.6 million in dividend was announced, having achieved 80% of GAAP net income in 1Q10.
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[1] Operating expenses have been adjusted to eliminate expenses with the stock options plan, depreciation and allowance for doubtful accounts, and tax on dividends from CME Group.
[2] Net income has been adjusted to eliminate deferred liability recognized in correlation with temporary differences from amortization of goodwill for tax purposes, the impact of the stock options plan and the investment in associate (CME Group) accounted for under the equity method of accounting, net of taxes.