Oslo Børs VPS Holding reports a profit of NOK 94 million for the second quarter of 2018 (NOK 114 million).

A more detailed presentation by business areas is provided in the quarterly report (enclosed).

The second quarter saw continued high levels of market activity in the primary and secondary equity and fixed income markets. Reported revenue for the second quarter of 2018 was NOK 267 million, which is NOK 8 million higher than in the second quarter of 2017. Reported revenue for the first six months of 2018 was NOK 21 million higher than in the first six months of 2017.

Revenue from both Oslo Børs and VPS increased by approximately NOK 3 million each compared with the same quarter in 2017, while for the first six months of 2018 revenue from Oslo Børs and VPS increased by NOK 12 million and NOK 5 million respectively. 

Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 136 million in the second quarter of 2018, an increase of NOK 14 million from the second quarter of 2017. Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value for the first six months of 2018 were NOK 22 million higher than in the first six months of 2017. The increase principally relates to restructuring costs at VPS in connection with modernising and adapting the organisation to the new competitive situation, project costs at VPS (including in connection with CSDR, GDPR, share shavings accounts and a new issuer portal), and higher supervision fees payable to the Financial Supervisory Authority of Norway for all the companies in the group that require official authorisation.

Since autumn 2017 VPS has been implementing changes to its management and organisation as part of its preparations for the new competitive situation. Audun Bø became the company’s new CEO in October 2017, while in June 2018 Ingvild Kalleberg and Christian Aleksander Viken became the company’s new CTO and head of Customer Experience and Analysis respectively. VPS has also started adapting and modernising a number of parts of its organisation, and it expects to have slightly fewer than 100 employees by the end of 2019 (down from 107 at the start of 2018).

The Board of Directors of Oslo Børs VPS Holding completed a strategy process in the first six months of 2018.

The Norwegian market, which is the group’s main market, is enjoying good growth, and Norwegian and foreign issuers are showing increasing interest in making use of Norway’s securities market. In addition to the greater focus on personal saving in securities that is being driven by new savings and pension arrangements, there is a particular focus from the EU and Norwegian authorities on increasing the extent to which small and medium-sized companies use the securities market for financing. Against this background, the group expects growth in the use of its services in the coming years.

The group’s overall strategy is to maintain its position in the Norwegian market. We will seek to further strengthen our international position in relation to the listing, registration, trading, settlement and custody of equities and fixed income issues, both within and beyond our sectors of particular strength.

VPS and the post-trade sector are facing a period of major change with greater international standardisation and efficiency improvements and, in the Board’s view, this will increase the number of opportunities for collaborating with other organisations going forward. The Board is open to VPS working together with other organisations in order to achieve its strategic goals and thereby increase its competitiveness.

Conditions in the group’s markets and its revenues will vary over time, but the group has a target of generating the basis for underlying growth in its activities regardless of fluctuations in market conditions. The group has a target of over time achieving average annual growth in underlying EBITDA of 5% from 2016. The group’s operating expenses before depreciation and amortisation are expected to be around NOK 540 million in 2018 and to be at the same level in the 2019-2021 period.