Deutsche Borse AG’s third quarter earnings before interest and taxes came in at €109.8 million, up from last year’s €109.1 million.
Not surprising given the increase, earnings per share rose by 22% in the third quarter to €0.60, compared to € 0.49 at the same period last year. The company also generated a further €15.9 million from net interest income from the banking business in the third quarter.
Even as third quarter earnings were up, sales revenue dipped slightly to €347.1 million, compared to €362.9 million last quarter. However, looking at year-to-date results, the company’s sales revenue of €1,085.2 billion during the first nine months is up around 2% over the results during the same period in 2003 – €1,065.3 billion.
By segment, Clearstream again recorded the highest sales revenue in the third quarter – up 3% to €142.6 million – driven by the custody and connectivity business. In its largest business area, custody, volumes increased by 2% year-on-year to €7.4 trillion. The connectivity business grew in during the quarter due to the rollout of CreationOnline, the new interactive browser interface, by 19% to €11.4 million. CreationOnline gives Clearstream customers real-time access to the settlement platform Creation.
Meanwhile, the Eurex segment generated sales revenue of €96.7 million in the third quarter, down from €103.8 million last year. At €38.7 million, EBIT in the derivatives market was also down year-on-year – Q3/2003: €51.7 million. The decline in sales revenue was attributable to the expiration of the contract with the Chicago Board of Trade at the end of January 2004 and a decrease in trading activity in the third quarter. At 804.2 million contracts during the first nine months, the trading volume is up 3% year-on-year.
Deutsche Borse AG’s CFO Mathias Hlubek was pleased with earnings in the third quarter. Despite the weak market environment, Deutsche Borse increased the company’s profitability for its shareholders and continued the success of previous years thanks to its diversified business model. “On the basis of our good earnings, we are confident that we will generate the forecasted EBIT of at least €450 million for the full year”, explained Hlubek. “We expect EBITA of around €600 million for 2005, based on the current market situation which is an increase of 15 percent compared to our guidance for this year. We will adjust our forecasts in the course of Q1 to market conditions”. Due to the new IFRS standard, EBITA (earnings before interest, taxes and goodwill amortization) will replace the EBIT indicator. Based on the applicable accounting standards, EBITA of €600 million corresponds to EBIT of around €530 million.