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B3 Announces Results For The Third Quarter Of 2018

“B3” or “Company”; ticker: B3SA3) reported today its third-quarter earnings for the period ending on September 30, 2018 (3Q18). Total revenues reached R$1,272.5 million, an 8.7% increase over the third quarter of 2017 (3Q17), while recurring EBITDA1 amounted R$776,2 million, growth of 16.2%, showing the Company’s operational leverage. The Company’s recurring net income2 in 3Q18 was R$613.4 million.

B3 reaffirms its previously announced 2018 guidance for adjusted expenses3 (OPEX), depreciation and amortization (D&A), revenue-linked expenses and adjusted capital expenditures4 (CAPEX), as follows:

  • Adjusted OPEX: R$960 – R$1,000 million;
  • D&A: R$910 – 980 million;
  • Revenue-linked expenses: R$200 – 220 million
  • CAPEX: R$220 - 250 million.

Other B3’s guidance for 2018 can be found in the Material Fact disclosed on May 10, 2018.

Chief Executive Officer of B3, Gilson Finkelsztain, said: “We are pleased with the growth we have seen in many of our business. We have focused our efforts on consolidating a corporate culture that continues to privilege proximity to our clients and their satisfaction, operational excellence of our services and ability to innovate. These attributes will be indispensable for B3 to continuously follow and stimulate the development and sophistication of the Brazilian financial and capital markets. Accordingly, in August we released a roadmap that contemplates more than 40 products and services to be delivered until the end of 2019 aiming to address the most important demands from our clients.”

Chief Financial and Investor Relations Officer, Daniel Sonder, added: “In the third quarter, the performance of markets in which we operate was directly impacted by volatility. We showed solid performance across our diversified business, and robust cash generation. Additionally, we distributed R$360 million in interest on capital, raising the total amount distributed in 2018 to R$1.0 billion, and we have also reported a cash position that give us comfort to face the R$1.5 billion in debt amortization scheduled for December 2018”.

Noteworthy 3Q18 events – at a glance:

  • Distribution of R$360.0 million in interest on capital (IoC) in the quarter reduced the Company’s tax base
  • Non-recurring expense of R$9.4 million related to Settlement Agreement with CADE
  • Impairment of fixed assets (real estate) in the amount of R$8.7 million with no cash impact
  • Expenses impacted by the market price of B3SA3 share: o R$15.3 million from provisions for legal disputes, for which a portion of the amount under discussion is updated according to the market price of B3SA3
  1. Personnel expenses related to long-term stock-based compensation of R$39.7 million in 3Q18, since the payroll charges that apply on that portion of the compensation are adjusted by market price of B3SA3
  • Negative FX impact of R$23.2 million in financial expenses, which was fully offset by lower income tax and social contribution, considering the hedge structure

To view the complete report of the Earning Results of B3 for the Third Quarter of 2013, please click here.

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