The TEL-AVIV STOCK EXCHANGE (TASE) announces its financial statements results for Q3 2022

An increase across all of the TASE's key performance indicators; adjusted EBITDA exceeded NIS 30 million and recorded a growth of over 30% compared to the same quarter last year

• 15% growth in revenues in the third quarter, amounting to NIS 86 million, compared to revenues of NIS 75 million in the same quarter last year.
• 34% growth in adjusted EBITDA in the third quarter, amounting to NIS 30.5 million, compared to revenues of NIS 22.8 million in the same quarter last year
• The adjusted profit in the third quarter reached almost NIS 8.8 million, a 10% decrease compared to the adjusted profit in the same quarter last year, mainly due to the increase in financing expenses.

Ittai Ben Zeev, CEO of TASE: "TASE is continuing its organic growth trajectory and has recorded an increase of 15% in revenues, an increase in all areas of activity and an increase of more than 34% in EBITDA compared to the same quarter last year. Despite the storms and high volatility in global markets, TASE is continuing to maintain stability and resilience compared to the world's leading stock exchanges, with an increase of almost 30% in trading volumes compared to last year, reaching a daily average of NIS 2.4 billion since the beginning of the year."

TEL AVIV, Israel, Nov. 29, 2022 /PRNewswire/ -- Today, the Tel Aviv Stock Exchange (TASE: TASE) reports its financial results for the third quarter of the year ended September 30, 2022.

TASE is continuing to show strength compared to the world's stock exchanges in this volatile period as well. Share trading in the first nine months of the year amounted to moderate decreases in rates compared to those recorded on the world's leading stock exchanges: The TA-35 index and TA-90 index were down an average 9% compared to a decrease of 25% and 21% in the S&P 500 and Dow Jones in the USA, respectively, and a decrease of 23% and 27% in the EURO STOXX 50 in Europe and the global MSCI, respectively. The TA-Oil & Gas index was the only index that increased during those months with a rise of 48% due to the effect of the increasing energy crisis in Europe and the growth in demand for natural gas imports from Israel, together with the rise in oil and gas prices. Vigorous trading volumes with a daily average of NIS 2.4 billion was recorded on the stock market in the nine months, a figure that is 27% higher than the average volume in the entire 2021. The increase in trading volumes was due mainly to the volatility of the share prices and the increasing investments by foreign residents in shares on TASE, with NIS 12.6 billion net in January to August, 2022, further to acquisitions amounting to NIS 13 billion net in the entire 2021.

TASE recently presented a new strategic plan for the coming five years that includes 4 key objectives: strengthening TASE's international profile as a global financial center, development of direct activity with the end customer, assessment of the establishment of a location-based platform for digital assets (DLT) and the sale of technological services and solutions intended for foreign stock exchanges. 

Based on TASE's goals, the strategic plan is expected to increase revenue CAGR by 10%-12% over the next five years, as a result of organic growth in activity. TASE intends to promote a restructuring that will support the implementation of the strategic plan; this will include a structure similar to that of other stock exchanges around the world, of a holding company under which various subsidiaries will operate that will be set up to implement the plan's objectives. TASE also intends to assess a program of strategic acquisitions and investments in its areas of activity and other areas of activity that will generate added value.

As part of the examinations that TASE performed in relation to the restructuring, TASE have received an opinion from a corporate law expert professor. According to the opinion, the amendment to the Securities Law determines that the historic TASE members that were shareholders shortly before the restructuring are not entitled to receive for their shares – as a dividend, in a sale or otherwise – any amount exceeding the shareholders equity of TASE in 2015. Therefore, the maximum consideration that the historical shareholders members may receive upon the sale of those shares must be adjusted for all the dividends that have been and that will actually be distributed by TASE, up to the sale of the shares. In accordance with the amendment to the Law, the maximum consideration receivable by the historical TASE members that hold the Shares is NIS 5.08 per share. To date, and pursuant to the opinion, the consideration is NIS 4.58 per share, in dividend-adjusted values. The difference between the share price at the time of sale and the dividend-adjusted price will be transferred to TASE and will be used for technological upgrades and developments of the TASE's systems.

Below are the key results of the quarter and the nine months ended September 30, 2022:

Revenues in the third quarter of 2022 amounted to a total of NIS 86 million compared to revenues in the same quarter last year of NIS 75 million, an increase of 15%. In the quarter, a growth in revenues was recorded in all activities:

Revenues from trading and clearing commissions amounted to NIS 33.4 million, a growth of 16% compared to the same quarter last year, mainly as a result of an increase in trading volumes between the periods. The Company's trading and clearing revenues were impacted, inter alia, by the number of trading and clearing days. The number of trading days in the third quarter of 2022 amounted to 61 compared to 56 in the same quarter last year, an increase of 9%.

Revenues from listing fees and levies recorded a growth of 18% to an amount of NIS 19.9 million, mainly resulting from a growth in revenues from listing fees and an increase in annual levies due to an increase in the number of companies and funds.

An increase of 9% was recorded in clearing service revenues, due mainly to a rise in revenues from clearing services to members.

Revenues from the distribution of information and connectivity increased at a rate of 11% to NIS 14.4 million, mainly due to an increase in revenues of 6% from the distribution of information to business customers outside Israel, primarily in view of an increase in activity and changes in the price list that came into effect in the second quarter of the year. Furthermore, the increase in revenues from connectivity services and the sale of information through the API services lead to a 2% rise in revenues in each.

Revenues in the nine months of 2022 recorded an increase of 15% in the period, amounting to a total of NIS 274.7 million compared to revenues in the same quarter last year of NIS 237.9 million. The increase in revenues is due to an increase in all activities, with emphasis on a 15% rise in the trading and clearing segments and an increase of 26% in revenues from listing fees and levies, including the effect of a change in the estimated listing fee revenues for the recognized period, which is 3% of the total increase. We should recall that in the second quarter of 2021, with the signing of an agreement between the TASE and the Ministry of Finance, nonrecurring revenue in the amount of NIS 3.8 million was included in respect of listing fees of government bonds in the lending pool.

Costs in the third quarter of 2022 amounted to a total of NIS 68.8 million compared to NIS 64.4 million in the same quarter last year, an increase of 7%.  The rise in costs is due mainly to an increase in marketing expenses (4% of the total costs), an increase in depreciation expenses (2% of the total costs), and an increase in IT and communication expenses and general and administrative expenses that were partially offset by a decrease in employee benefit expenses.

Costs in the nine months of 2022 amounted to a total of NIS 210.3 million compared to NIS 200.5 million in the same period last year, an increase of 5%. The increase in costs is due mainly to an increase in in depreciation and amortization expenses, marketing expenses, employee benefits and IT and communication expenses (1% of the total costs).

Net finance expenses in the third quarter of 2022 amounted to a total of NIS 4.1 million compared to NIS 1.8 million in the same quarter last year. The transition to finance expenses in the quarter is due to a negative return of 2.2% on the Company's investments in Israeli government bonds managed in the marketable securities portfolios, compared to a positive return of 1.0% in the same quarter last year.

Net finance expenses in the nine months of 2022 amounted to a total of NIS 12.8 million compared net finance expenses in the same period last year, which amounted to NIS 3.3 million. The transition to finance expenses in the quarter is due to a negative return of 6.4% on the Company's investments in Israeli government bonds managed in the marketable securities portfolios, compared to a positive return of 1.8% in the same period last year.

Net tax expenses in the third quarter of 2022 amounted to a total of NIS 4.4 million compared to NIS 2.7 million in the same quarter last year. The increase in expenses is due to a rise in earnings before tax and a decrease in the fair value of the Company's investments in government bonds for which no deferred taxes were created.

Net tax expenses in the nine months of 2022 amounted to a total of NIS 14.0 million compared to NIS 9.3 million in the same period last year. The increase in expenses is due to a rise in earnings before tax and a decrease in the fair value of the Company's investments in government bonds for which no deferred taxes were created.

Adjusted EBITDA in the third quarter of 2022 amounted to a total of NIS 30.5 million compared to NIS 22.8 million in the same quarter last year, an increase of 34%. The increase is due to an increase in revenues of 15% as a result of an increase in activities and a rise in expenses of 6%, mainly in respect of the timing of marketing costs.

Adjusted EBITDA in the nine months of 2022 amounted to a total of NIS 103.1 million compared to NIS 73.5 million in the same period last year. The increase is due to an increase in revenues of 15% mainly as a result of an increase in activities, offset by an increase in expenses of 4%, primarily in respect of marketing costs and employee benefits.

Earnings in the third quarter of 2022 amounted to a total of NIS 8.7 million compared to NIS 9.6 million in the same quarter last year, an increase of 10%. The decrease in earnings is due mainly to finance expenses resulting from a negative return on the Company's investments in financial assets held for trading and an increase in tax expenses, which were partially offset by an increase in earnings before finance expenses, as specified above.

Earnings in the nine months of 2022 amounted to a total of NIS 37.6 million compared to NIS 31.4 million in the same period last year, an increase of 20%. The increase is due to an increase in revenues from services, which was partially offset by an increase in expenses, transition to finance expenses and an increase in tax expenses.

Adjusted earnings in the third quarter of 2022 amounted to a total of NIS 8.8 million compared to NIS 9.8 million in the same quarter last year, a decrease of 10%. This is while operating profit increased at a rate of 64% compared to the same quarter last year. The decrease in adjusted earnings is due mainly to finance expenses resulting from a negative return on the Company's investments in financial assets held for trading and an increase in tax expenses, which were partially offset by an increase in earnings before finance expenses, as set out above.

Adjusted earnings in the nine months of 2022 amounted to a total of NIS 38.0 million compared to NIS 32.0 million in the same period last year, an increase of 19%. This is while operating profit increased at a rate of 72% compared to the same period last year. The increase in adjusted earnings is due to an increase in revenues of 15% mainly as a result of an increase in activities, offset by an increase in expenses of 5%, primarily in respect of marketing, employee benefit and depreciation costs and the transition to finance expenses resulting from a negative return on the Company's investments in financial assets held for trading and an increase in tax expenses.

This announcement is not in lieu of the Company's financial statements, which include complete and accurate information.

Seasonality

List of trading days by quarter:

A link to the complete financial statements for the third quarter of 2022>

A link to a presentation of the financial statements for the third quarter of 2022>

Contact:
Orna Goren
Head of Communication and Public Relations Unit
Tel: +972 76 8160405
[email protected]

SOURCE The Tel Aviv Stock Exchange Ltd.