BSE-Sofia Q3’17 cons services revenue up 78% YoY; NI falls to BGN 155k, -28.9% YoY (NEUTRAL)

BSE-Sofia cons revenue was down 1.6% to BGN 720k for Q3’17, but development should be viewed as positive due to shift in revenue mix. Core revenue from services gained 78% to BGN 707k, while decrease came from other revenue, which fell to BGN 13k, vs. BGN 335k in Q3’16; the stock exchange booked BGN 306k in LT asset sales in the comparable period. The growth in core revenue came on the back of the significant turnover on regulated market of BGN 276m (Q3’16: BGN 80m). OpEx increased at a quicker pace, adding 11.5% YoY to BGN 599k, driven by a 5.8% YoY (+3.9% QoQ) increase in compensations and a more noticeable 17.5% YoY (+46.1% QoQ) increase in hired service costs to BGN 282k. The growth in OpEx and drop in revenue brought down EBITDA to BGN 121k. Changes in financial income and D&A were negligible in absolute terms, and BSE-Sofia ended the quarter with a profit of BGN 155k (-28.9% YoY). For the 9mo’17 revenue was up 10.6% YoY to BGN 1.7m, while OpEx decreased by 1.6% YoY, despite a 4% growth in compensations. EBITDA for the 9 months came at BGN 57k, compared to a loss of BGN 130k a year ago. This translated down to the bottom line, where BSE-Sofia ended with BGN 127k profit. The balance sheet revealed no surprises, with changes due to materialize after the expected closing of the Independent Bulgarian Energy Exchange acquisition.