New Euronext reports strong underlying profit, shares rally
European stock market operator Euronext, recently floated free from the US international exchange market, reported a net profit plunge on Thursday, but underlying performance was strong and boosted shares.
The net profit for the first half was 36.2 million ($48.4 million), down 58.0 percent from the equivalent figure last year, reflecting restructuring and exceptional costs.
But operating performance in the second quarter jumped 14.6 percent, pushing Euronext shares up 3.06 percent to 17.85 euros in initial trading on its own market in Paris.
This was still short of the issue price in June when the shares were launched at 20 euros, valuing the business at 1.4 billion euros.
Operating profit in the second quarter was 54 million euros, boosted by an increase in trading activity as economies recover and several flotations by companies obtaining a listing.
Sales for the first half rose by 6.9 percent to 222.5 million euros.
The company said that a cost-cutting programme had generated charges of 19.9 million euros which had eaten into the net profit line.
The tax charge surged to 43.7 million euros from 10.3 million euros last time.
These were the first results to be published by Euronext as an independent business since it was floated free of the IntercontinentalExchange (ICE) in June.
With that initial public offering, the company returned to being an independent operator, having been acquired in 2007 by the New York Stock Exchange.
NYSE Euronext was then bought in 2013 by the ICE, which was not interested in the European activities.
Euronext was the result of a series of mergers around the Paris stock market which wanted to create a pan-European exchange.
Today Euronext operates the Paris, Amsterdam, Brussels and Lisbon stock markets.
"Euronext has achieved significant milestones in the first six months of the year," chief executive Dominique Cerutti said in a statement.
"Our focus now is to reposition Euronext as a leading capital raising centre."
He added: "We have confidence that we will reach 60 million euros of efficiencies and we are working on an aggressive plan to accelerate timing."
© 2014 AFP