Euronext profit falls in first quarter as acquisitions make a dent

Harry Robertson
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Euronext received the green light to buy Norway’s Oslo Bors exchange on Monday. (Source: Euronext)

Profit fell at European exchange Euronext in the first quarter of 2018, as the consolidation of its purchases of Ireland’s stock exchange and software company Commcise proved costly.

Read more: Norway all but hands victory to Euronext in Oslo Bors battle

Euronext, which received the green light to buy Norway’s Oslo Bors exchange on Monday, saw revenue grow in the first quarter due to its acquisitions, however.

The exchange’s profit before tax fell 7.8 per cent to €80m (£70m) in the first quarter of 2019 year-on-year, its quarterly results today revealed.

Its revenue rose 1.4 per cent to €152.6 million, with a contribution from recently acquired Euronext Dublin of €7.9m.

The company’s earnings per share fell 6.6 per cent year-on-year in the first quarter to €0.81.

The pan-European Exchange has been locked in a five-month tug of war with US exchange Nasdaq for Oslo Bors. It now looks all but certain to win the battle, however, after the Norwegian government approved the buyout on Monday.

Nasdaq, which has support from 37 per cent of Oslo Bors shareholders, had hoped regulators would say a two-thirds majority of shares was needed to secure a deal.

Yet the finance ministry said there were no restrictions, handing the advantage to Euronext which has greater support among Oslo Bors shareholders.

Stephane Boujnah, chief executive of Euronext, told reporters today that the takeover was “at the very heart of our ambition to make Euronext the backbone of Europe's unified capital markets”.

“Our aim for Oslo Bors VPS is to make what is today a strong company even stronger,” he said.

Boujnah said he expects the deal to be completed by June, saying it will strengthen “the leadership of Oslo and the Norwegian market in key markets such as shipping, oil and gas, and sea food”.

Today’s results revealed a fall in cash trading revenue at Euronext of 11.2 per cent year-on-year in the first quarter to €64.5m, in what the company called “a subdued volumes environment”.

Derivatives trading revenue fell by 1.5 per cent to €10.4m in the first quarter of the year.

Boujnah said of the results: “Euronext group’s revenue grew thanks to a successful acquisition and revenue diversification strategy and despite an environment of subdued volumes.”

“The first quarter of 2019 has been marked by the ongoing integration work of Euronext Dublin leading to its successful migration to the Optiq trading platform,” he said.

Read more: Euronext gives Oslo Bors shareholders more time to back its offer

Euronext shareholders will have a chance to vote on the purchase of Oslo Bors at the European exchange's annual general meeting tomorrow.