Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bolsas Y Mercados Argentinos SA (BUE:BYMA, Financial) reported a 34% growth in income in real terms, driven by increased activity.
- The Central Securities Depository showed a real growth rate of 20%, while the exchange side grew by 42%.
- Gross margin increased by 47% in real terms, indicating significant growth in business lines.
- The company's EBITDA margin reached an all-time high of 73%, significantly above the global average.
- Assets under custody grew significantly, with market value increasing by 400%, contributing to business line growth.
Negative Points
- Net income was negative for the quarter at ARS2.5 billion, primarily due to inflation adjustment impacts.
- Expenses grew by 20% in real terms, driven by salary adjustments and increased depreciation and amortization.
- Financial income was not sufficient to offset inflation adjustments, impacting overall net income negatively.
- The company's investment portfolio, being dollarized, showed relatively low returns in pesos compared to inflation.
- Operating income growth was limited to 13% in real terms due to lower other operating income compared to the previous year.
Q & A Highlights
Q: How do you expect the lockups to influence revenues in the coming quarters?
A: Alejandro Berney, Executive Director - Caja de Valores, explained that the growth rates have been doubling month on month, and they expect continued growth of lockups for a couple more months. The impact from the custody side was only partially seen this quarter, which should help increase revenues in the next quarters. However, they don't expect it to double again as lockups now constitute 9% of the total market value, up from 3% last year. The Central Bank's shift to relying more on the local capital market for financing has contributed to this growth.
Q: What is the impact of the inflation adjustment on the financial results?
A: Alejandro Berney noted that the inflation adjustment impact was significant, with inflation at 18-18.5% for the quarter. The financial income was not enough to offset this negative adjustment, resulting in a net income loss of ARS2.5 billion for the quarter. The dollarized portfolio's appreciation was limited by the official exchange rate, which only grew by 6.3%.
Q: Can you elaborate on the growth in the Central Securities Depository and Exchange?
A: The Central Securities Depository showed real growth rates of 20%, while the exchange side grew by 42%. The income grew 34% in real terms, driven by increased activity. The exchange saw a notable shift with local shares generating more revenue than international shares for the first time since 2020, indicating positive expectations for Argentina's macroeconomic situation.
Q: What are the reasons for the increase in expenses this quarter?
A: Expenses grew by 20% in real terms, primarily due to salary adjustments for staff, increased taxes related to higher invoicing, and expenses associated with international business growth. Depreciation also increased due to higher investment levels.
Q: How is the company managing risk in the on-exchange repo market?
A: Alejandro Berney emphasized a strong risk management approach, with BMA guaranteeing sufficient collateral for on-exchange repo activities. This cautious approach aligns with their risk appetite, resulting in slightly lower growth rates compared to other products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
