The Tel Aviv Stock Exchange reported a second quarter jump of 300% jump in net profit

The Tel Aviv Stock Exchange reported 17% growth in second quarter 2020 revenue and a 300% jump in net profit. The main factor for the big improvement in results: the corona crisis raised the market pressure, and turnover increased sharply. Despite the unusual jump in profits, the multiplier is still high. The stock market must continue to grow at a similar rate even after the crisis in order to justify market value.
The stock exchange's revenues in the second quarter of 2020 amounted to NIS 73.5 million, an increase of 17% compared to revenues of NIS 62.9 million in the corresponding quarter last year. Most of the increase in revenue was due to the increase in trading volumes on the stock exchange following the outbreak of the Corona virus, in addition to the increase in revenue from the distribution of information and connectivity services.
In the bottom line, the stock exchange reported a net profit of about NIS 10 million, a jump of about 300% compared to a profit of about NIS 2.5 million in the corresponding period.
Adjusted EBITDA in the second quarter amounted to NIS 21 million, compared with NIS 16.6 million in the corresponding quarter last year, an increase of 26%, attributed to an increase in revenue from services, and was partially offset by an increase in costs, mainly marketing costs and employee benefits.
Since the TASE's share began trading (beginning of August 2019), the stock has soared by 76% in a way that has boosted the TASE's market value to NIS 1.7 billion, reflecting a 56-fold increase in the TASE's profits in the last 12 months. The net profit in the second quarter of 2020, which reflects profits at an annual rate of about NIS 40 million, still reflects a high multiplier of about 42 in relation to the market value. In this regard, it should be noted that the activity of the stock exchange was materially positively affected as a result of the corona crisis, i.e., it is a temporary effect on the results.
The TASE's operating expenses amounted to NIS 63.9 million in the second quarter of 2020, an increase of 5% compared to NIS 61 million in the corresponding quarter last year.
Despite the increase in operating expenses and in view of the sharp increase in revenues, the TASE showed a decrease in the margin on operating expenses to a level of approximately 87% of revenues, compared with an operating expense margin of approximately 97% in the corresponding quarter.
Itai Ben Zeev, CEO of the Stock Exchange: "We are concluding a second quarter since the outbreak of the corona virus and its negative consequences for the economies in Israel and around the world. The support of governments and central banks in the world and in Israel for economic activity and citizens, under the restrictions imposed in many countries following the rise in morbidity, has led to a stabilization in stock prices and interest rates on the stock exchange, similar to what is happening in the world.
The stock exchange continues, especially at this time, to be a major factor in government fundraising to finance its activities and the return of companies to raise capital and debt on the stock exchange. From the beginning of the year, the increase in trading volumes and liquidity has led to a significant entry of the general public and we hope that they will remain as permanent activists in the Israeli capital market. The stock exchange continues all the time, even in this challenging period, to develop new products, expand the basket of services and provide an optimal response to the changing needs of the market. "