THE TEL-AVIV STOCK EXCHANGE REPORTS THE RESULTS OF THE FINANCIAL STATEMENTS FOR THE FOURTH QUARTER AND FOR 2022
TASE Concludes the Year with a 12% Increase in Revenues and the Net Profit;
Ittai Ben Zeev, CEO of TASE, said today: "TASE closes 2022 with strong financial statements and record results, including continued organic growth, with a significant 12% increase in revenues and an impressive 31% increase in the adjusted EBITDA. Equity trading volumes were the highest in 12 years, following the trend of the recent years. It is evident that TASE's strategic plans and business activity contribute to the continued growth of TASE for the benefit of the investors and the companies and the advancement of the Israeli capital market."
Ben Zeev addressed the current state of the markets, and said that: "TASE is the reflection of the Israeli economy and politics. Recent months have been characterized by uncertainty that has arisen from the macroeconomic challenges and the concerns surrounding the judicial reform. The latest events are a turning point and I strongly believe that the decision to negotiate over the differences can restore the certainty that is crucial to a strong and stable market, and can pave the way for the future growth of the Israeli economy. Today, more than ever, is the time to implement moves that will strengthen and advance the Israeli capital market, alongside implementation of innovative tools and technologies in order to enhance competition and for the benefit of investors and Israeli companies"
TEL AVIV, Israel, March 28, 2023 /PRNewswire/ -- The Tel-Aviv Stock Exchange (TASE: TASE) today announced its financial results for the fourth quarter ended December 31, 2022 and for 2022.
2022 was characterized by volatility, ending in price drops in the equity market and the bond market, as was also the case in leading global exchanges. Nevertheless, the Israeli market exhibited strength, with relatively moderate reductions in TASE's share indices and bond indices compared to the global trend. The price drops on the global markets were influenced by the inflation surge that resulted in aggressive interest rate increases by central banks and a slowdown in economic activity.
The volatility in the equity market resulted in lively activity on TASE, with strong trading volumes on the equity market, which grew by 22% over the previous year, reaching the highest volumes recorded since 2011. Foreign investments in TASE's equity market also remained strong in 2022, totaling a net amount of NIS 14.1 billion, continuing to the NIS 13 billion, total net purchases in 2021.
Principal activities in 2022
TASE continues to implement the strategic plan, including by entering the digital currency sector, and has recently announced the launch of Cryptocurrency trading by customers of non-bank members. TASE has also made progress in the POC for the establishment of a Blockchain digital-asset trading platform that is planned to take place this coming May in collaboration with the Ministry of Finance, by way of issuance of government bonds.
TASE constantly works to increase competition and develop the indices sector in alignment with global standards, including the creation of tailor-made indices that are based on TASE's trading data. Within this framework, it has signed a first-of-a-kind agreement with the Yelin Lapidot investment house, welcomed a new member - Blink Fintech Israel, as a retail broker, and has engaged with Avelacom, a leading international provider of low latency connectivity services to global financial markets, to provide solutions for TASE's co-location services.
In addition, as part of the strategic plan and pursuant to TASE's application, it announces that the TASE Clearing House has been recognized by the European Securities and Markets Authority (ESMA) as a Tier 1 Third-Country CCP, in accordance with the applicable European regulation. This qualifies the TASE Clearing House to provide clearing services to European trading platforms, to take in as Clearing members entities incorporated in the European Union, and to operate in a variety of complex financial instruments. The recognition places the TASE Clearing House on par with leading global exchanges in terms of compliance with the international standards of risk management and financial stability. This move coincides with our strategic plan to expand our services to the international investors and advance the local capital market.
Highlights of the results for the fourth quarter of 2022:
Revenue in the fourth quarter of 2022 totaled NIS 86.3 million, compared to revenue of NIS 85.7 million in the corresponding quarter last year, an increase of 1%. The increase is due to an increase across all items, with the exception of revenue from trading and clearing commissions, which decreased by 8% between the quarters, totaling NIS 33.8 million in the fourth quarter of 2022, mainly as a result of the fewer trading days in the quarter, this despite the increase in the trading volumes.
Costs in the fourth quarter of 2022 decreased by 2%, totaling NIS 67.5 million, compared to expenses of NIS 68.7 million in the corresponding quarter last year. The decrease in the costs is due mainly to a reduction in employee benefit expenses and a reduction in marketing expenses as a result of the timing of performance of campaigns. The decrease was partly offset by an increase in computer and communication expenses and in depreciation expenses.
Net financing expenses in the fourth quarter of 2022 totaled NIS 0.5 million, compared to net financing income of NIS 1.3 million in the corresponding quarter last year. The transition to financing expenses this quarter resulted from a negative return of 0.67% on the Company's investments in marketable securities' portfolios comprising Israeli government bonds, compared to a positive return of 0.71% in the corresponding quarter last year.
The profit in the fourth quarter of 2022 totaled NIS 13.2 million, compared to NIS 14.1 million in the corresponding quarter last year, a decrease of 6%. The decrease in profit is due mainly to the effect of the reduction in the number of trading days and to the financing expenses, as described above.
Tax expenses, net in the fourth quarter of 2022 totaled NIS 5.2 million, compared to NIS 4.2 million in the corresponding quarter last year. The increase in expenses was due to the higher pre-tax profit and the reduction in the fair value of the Company's investments in government bonds for which deferred taxes were not created.
The adjusted EBITDA in the fourth quarter of 2022 totaled NIS 32.1 million, compared to NIS 29.5 million in the corresponding quarter last year, an increase of 9% between the quarters. The increase is due to the higher revenue from most services, alongside the decrease in expenses, mostly employee benefits expenses and marketing expenses.
The adjusted profit in the fourth quarter of 2022 totaled NIS 13.3 million, compared to NIS 14.2 million in the corresponding quarter last year, a decrease of 6%. The decrease is due mainly to the transition to financing expenses this quarter, compared to financing income in the corresponding quarter last year, as described above.
Highlights of the results for full fiscal year 2022
Revenue in 2022 totaled NIS 361.0 million, compared to revenue of NIS 323.7 million in 2021, an increase of 12%. The increase is comprised of revenue from trading and clearing (4% of total revenue) and revenue other than from trading and clearing (8% of total revenue).
The costs in 2022 totaled NIS 277.8 million, compared to expenses of NIS 269.2 million in 2021, a 3% increase. The increase in the costs is due mainly to a rise in depreciation and amortization expenses, stemming mainly from the upgrading of infrastructures and the launching of new products in the trading and clearing environment, and to a rise in computer and communication expenses and marketing expenses.
Net financing income (expenses) in 2022 totaled NIS 13.2 million net financing expenses, compared to net financing income of NIS 4.5 million in 2021. The transition to financing expenses in the period is due to a negative yield of 7.0% on the Company's investments in Israeli government bonds managed in marketable securities' portfolios, compared to a positive yield of 2.5% in 2021.
The profit in 2022 totaled NIS 50.8 million, compared to NIS 45.5 million in 2021, an increase of 12%. The increase in profit is due to an increase in revenue from services, which was partly offset by the rise in expenses, a transition to financing expenses and an increase in the tax expense.
The adjusted EBITDA for 2022 totaled NIS 135.2 million, compared to NIS 103.0 million in 2021, an increase of 31% between the years. The increase is due mainly to a 12% rise in revenue, primarily as a result of the higher volume of activity, which was partly offset by a 2% increase in expenses, primarily computer and communication expenses and marketing expenses.
The adjusted profit in 2022 totaled NIS 51.4 million, compared to NIS 46.2 million in 2021, an increase of 11%. The increase in profit is due mainly to a 12% rise in revenue, mainly as a result of the higher volume of activity, which was offset by a 3% increase in expenses, primarily with respect to computer and communication expenses, marketing expenses, depreciation and amortization expenses, the transition to financing expenses as a result of the negative return on the Company's investments in held-for-trade financial assets and an increase in the tax expense.
As of December 31, 2022, TASE has a capital surplus (qualified capital less requirement) of NIS 613 million and surplus liquidity (net liquid assets less requirement) of NIS 257 million.
Click here for the link to the full financial statements for the fourth quarter of 2022 and the full year 2022>
Click here for the link to the financial presentation of the fourth quarter of 2022 and the full year 2022>
This notification does not supersede the stated in the periodic financial statements of the Company for the fourth quarter of 2022 and the full year 2022, which contain the full and accurate information.
The revenue of the Company from trading and clearing is affected, inter alia, by the number of trading and clearing days. Presented below is information on the quarterly breakdown of trading days:
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SOURCE Tel Aviv Stock Exchange Ltd