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B3's Q1 recurring net profit slides 15% on negative financial results

Brazilian stock exchange operator B3 SA – Brasil, Bolsa, Balcão registered a 15.0% decline in its first-quarter recurring profit as it booked a loss in its financial results.

Quarterly recurring net income for the bourse hit 448.2 million reais, down from the 527.2 million reais earned in the same period a year ago.

Net revenues improved 18.2% to 1.11 billion reais in the three-month period from 940.9 million reais a year earlier. Revenues from the Bovespa segment totaled 354.3 million reais, or 28.7% of the firm's overall revenues, while those from the BM&F segment reached 309.2 million reais, representing 25.0% of the total.

B3's operating income soared 173.1% year over year to 509.1 million reais from 186.4 million reais as expenses declined 20.1% to 602.8 million reais.

B3 added that excluding amortization of intangible assets of 187.2 million reais recognized in the company's merger with Cetip SA – Mercados Organizados, total expenses for the quarter would have fallen 44.9%.

The company reported a loss of 22.5 million reais in financial results for the quarter, compared to a gain of 198.8 million reais in the prior-year period. This, B3 said, was due mainly to the fact that it was holding a higher cash position in the first quarter of 2017, a period in which interest rates in Brazil were significantly higher.

In providing guidance for 2018, B3 said it expects adjusted expenses to range between 960 million to 1.00 billion reais, compared to 971.6 million in 2017, while depreciation and amortization costs are seen totaling between 910 million and 980 million reais this year, up from 742.1 million reais in 2017.

"The beginning of 2018 continued to show positive market conditions," CEO Gilson Finkelsztain said in a statement. "We witnessed all-time high volumes in both the equity and the listed derivatives markets, reflecting higher stock prices and risk appetite from investors."

As of May 10, US$1 was equivalent to 3.55 Brazilian reais.