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Euronext third-quarter revenue hurt by Brexit uncertainty, lower volatility

(Reuters) - Pan-European exchange Euronext ENX.PA reported a 15.2 percent fall in third-quarter revenue on Wednesday, hurt by a drop in listing and trading volumes that it blamed on uncertainty following Britain's vote to leave the European Union.

A stock market operator Euronext's universal analyst works in the market services surveillance room center at the new Euronext headquarters at La Defense business and financial district in Courbevoie near Paris, France, October 30, 2015. REUTERS/Benoit Tessier

Euronext, which operates bourses in Paris, Amsterdam, Brussels, London and Lisbon, said revenue fell to 112.8 million euros (102 million pounds) in the quarter ended Sept. 30, from 133 million euros a year earlier.

Seasonally low levels of volume in cash and derivatives markets were further hurt in July and August as a result of the June 23 referendum, which saw volatility drop to 12-month lows after a brief spike in the final days of June, Euronext said.

Operating profit before exceptional items fell 21.7 percent to 57.5 million euros in the quarter.

The result stands in contrast to Europe’s larger exchanges.

London Stock Exchange Group Plc LSE.L, which is trying to merge with Germany's Deutsche Boerse DB1Gn.DE, saw strong business in the third quarter as the British stock market hit record highs. Deutsche Boerse's results were buoyed by its commodities and international clearing business.

Euronext said it expected full-year revenue to fall by a mid-single digit percentage and that its EBITDA margin would be higher than 2015.

The company’s listing revenue fell 30.4 percent to 13.8 million euros in the quarter. Total capital raised fell to 411 million euros, against 698 million euros a year earlier, as companies held back from tapping the markets.

“This quarter, the global IPO market was put on hold with some flagship transactions expected in Q3 2016 postponed due to the market environment,” Euronext said.

The period before November’s U.S. presidential election had been expected by bankers to offer a window for a series of IPOs, but market volatility and subdued investor demand have proved disruptive despite stock indexes being close to record highs.

Euronext’s cash trading volumes fell 29.4 percent to 5.8 billion euros in the quarter, hurt mainly by reduced investor confidence post Brexit and lower volatility.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sunil Nair

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