Good morning, ladies and gentlemen, and welcome to the audio conference call about the earnings results of B3 for the 4th quarter of 2018. As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded. I would now like to turn the conference over to Mr. Daniel Sonder, Chief Financial Officer of B3.
Hello, everyone, and welcome to our Q4 2018 earnings call for B3. I am here with Roger de Santana, Head of Investor Relations as well as the Finance and Investor Relations teams. And I'd like to thank all of them for preparing the documents you have in front of you and all the materials you see in our website. Additionally, on behalf of the entire executive team of V3, I'd like to thank you for your continued trust and support. I'll start the presentation in slide number 3, where I'd like to highlight some important achievements and figures for 2018.
The current level of interest rates in Brazil and more importantly, their stability at low levels is unprecedented in the Brazilian market. This is already changing the portfolio location of investors. There are signs of increased market sophistication, which intensified in 2018. Low rates, allied with the reduction in the participation of government owned banks as a source of funding for corporates in Brazil, should have a transformational and long term impact in the Brazilian capital markets. The significant improvement in the business environment resulted in great figures in our markets.
Examples are record of ADTV in cash equities and ADV in listed derivatives that benefited from our robust trading and clearinghouse infrastructure as well as double digit volume growth in volumes registered in our securities segment. At the same time that we have prepared and executed well in supporting the market in this significant recovery, B3 also worked on several strategic long term fronts. With the conclusion of the integration between Davenport VESPA and Seteep, we concentrated our efforts on strengthening our corporate culture, focusing on customers, operating credibility and our capacity to innovate. P3 went through a broad and in-depth strategic planning exercise during the year of 2018. Our strategy will focus on customers, services and products in our core business: cash equities, derivatives, fixed income as well as financing and data and analytics linked with these segments.
We have a clear determination to keep and strengthen our competencies in operations and risk management, cutting edge technology and innovation, customer relationship and service, engagements with regulators and development and retention of human talent. As a result, we have launched several projects and concrete actions that support our plan. Additionally, a smaller portion of our efforts will be directed to the analysis of opportunities for selective diversification. As a first deliverable of this strategy and corporate culture, in August 2018, B3 published a roadmap of products and services expected to be launched in 2018 2019. The execution of this roadmap will contribute to the continuous development and certification and these products were developed with our customers.
Additionally, the company started an important effort to improve our customer support services. A new way of doing customer support will be launched in the first half of twenty nineteen with the purpose of enhancing our customers' day to day experience. Finally, in the financial area, we used our strong cash generation during 2018 to further reduce our level of indebtedness and distribute BRL1.4 billion of cash to our shareholders. We move now to Slide 4, where we show the operating and financial highlights for the quarter. The Q4 was marked by increased activity in the financial markets in Brazil, reflecting the electoral cycle and its consequences.
In this context, we had a solid performance across our business segments. ADTV grew 55% in the VOVESTA segment, ADV increased 16% in the BMNF segment and the value outstanding of Sativ Security segment increased by 12%. On the right side of the slide, we see that this operating performance is reflected in our revenues, which grew by 27% year over year. Adjusted expenses reached BRL272 million, 4% lower than in the Q4 of 2017, and I'll explain in more details later in the presentation. EBITDA adjusted for nonrecurring items was $914,000,000 an increase of almost 36% over the previous year, with an EBITDA margin of more than 69% in the quarter.
Once again, B3 has demonstrated our considerable operating leverage. Recurring net income reached $715,000,000 a 12% increase, mainly explained by the increase in operating results. On this slide, you can also see our operating financial performance for full year 2018, and we also delivered solid top line and bottom line growth for that period as well as expense discipline. Now, Rogerio will give you more details about our operating performance.
Thank you, Daniel. Hello, everyone. I would like to ask you to move to Slide 5, where you see the revenue performance and breakdown for the Q4 2018. In the bar charts, on your left side, we see that revenues from all four segments grew year over year, leading to a solid performance of more than 27% growth in total revenue. The main highlights were the Bovespa and BMNF segments that you can see on the left side of this chart.
In the pie chart on the right side, we see the breakdown of revenues for the quarter, which shows once again the highly diversified and well balanced business model we have with Bovespa segment gained some share over the other segments due to its recent strong performance, as Daniel mentioned. Moving to Slide 6, you will find details on the performance of the financial and commodity derivatives markets, where we had a 27.5% increase in revenue. As you can see, total volume increased more than 15% and amounted to 3,700,000 contracts per day on average in the quarter, expanded by the increase in FX rates, equity based index and interest rate in U. S. Dollar contracts.
We also saw a significant growth in the average RPC in the periods, explained by the appreciation of the U. S. Dollar against the Brazilian real, with a positive impact on the RPC of future contracts for FX rate and interest rate in U. S. Dollar.
In Slide 7, we have the performance of the equities market within Bovespa segment, where we also saw revenue growing 50% year over year, driven by a 55% increase in ADTV from BRL10 1,000,000,000 in the Q4 2017 to almost BRL16 1,000,000,000 in the last quarter of 2018. This performance reflects the increased volatility in the Brazilian capital markets in the quarter from the electoral periods, as Daniel mentioned, which was translated in an increase of turnover loss from almost 78% in the last quarter of 2017 to more than 106% in the Q4 2018. In addition, the average market capitalization increased by 13% in the same period. The trading and post trading margins went down 3.2% in the Q4 2018 versus the same period of the previous year, explained by the higher participation of day traders and marginal discounts applied to all investors in accordance to our volume related discount policy that we designed for this segment. Next, in Slide 8, we present the performance of the strategic secured segment.
The additional value of securities and contracts register in the quarter was up almost 30%, mainly driven by the increase of 33% in registration of OTC derivatives and Structural Notes, in addition to the increase of 24% in insurance of fixed income instruments, which positively impacted the outstanding positions, which reached an average of BRL 7 point 4,000,000,000 in the quarter, which means a 12% increase over the last quarter of 2017. This performance led to an increase of 16% in revenues compared to the Q4 2017 and amounted to BRL314 1,000,000 in the quarter. In Slide 9, we show revenues for the Fetip, Lien and Lowen segments, which grew 32% in the period. When analyzing the different revenue lines in this segment, the increase of 17% in Lian's revenues within SMG line reflects the 7.2% increase in number of vehicles financed in the country and also some adjustments done in our pricing schedule in the period. Regarding the contract system, the increase of 46% in revenues is explained by the implementation of a new model for these services in some states of Brazil.
Such change in the business model positively impacted revenue line, but new revenue linked expenses more than offset this impact as we have discussed over the previous quarters. It's also important to highlight that the company's market share in the contract system contracted to 56% in the Q4 of 2018 from 65% in the same period 1 year before. This reduction is expanded by the interruption of our service in the state of Parana, which occurred in October 2018. In the next slide, we show the company's adjusted expense and how it evolved in the periods. Adjusted expenses amounted to BRL272 1,000,000 in the Q4 2018, which means 4% decrease year over year.
Demand reduction happened in the adjusted personnel expense line, while we saw growth in data, processing and third party services expenses. This last one reflects in fees paid to consulting companies hired to support us in strategic projects. Now I will hand over the presentation back to Daniel, who will show other financial highlights of the quarter.
Thank you, Rogerio. In Slide 11, we demonstrate our financial robustness with a solid cash position, which is an important part of the business of being a credible counterparty in the financial market. Total cash amounted to BRL8.2 billion at the end of the quarter, composed by B3's own cash and third party cash, mainly related to collateral pledged in cash by clients. In the light blue bars, you'll find B3's own cash amounting to BRL5.3 billion in Q4 2018, which includes BRL423 1,000,000 in interest on capital that were already paid out in early January 2019. The bars on the left side of the chart show 3rd party cash, which amounted to $2,900,000,000 mainly composed by market participants cash collateral of $2,100,000,000 It's important to highlight that the company does earn interest on most of this cash balance.
On Slide 12, you will see the company's debt profile and amortization schedule. After analyzing our financial strategy, we concluded that there was room to change our capital structure and hopefully create value for our shareholders through that. As a result, we changed our guidance for financial leverage and payout for 2019. Our financial leverage considering gross debt to recurring EBITDA was 1.2x at the end of 2018 and our new target for the end of 2019 is to increase leverage up to 1.5x gross debt to recurring EBITDA. We believe this change will not impact the overall perception of robustness of our balance sheet.
At the same time, we increased our payout ratio target to a range between 120% 150% of our IFRS net income compared to a ratio between 70% 80% previously. In Slide 13, finally, you can see how we will present our revenue breakdown from Q1 2019 onwards. This new segmentation grouped in listed OTC Infrastructure for Financing and Technology, Data and Services aims to reflect more accurately in the financial statements how V3 is conducting its business after the integration of the MNF, Ovesco and Cetip. The Investor Relations team is prepared has prepared historical reconciliation of this data to help all of you in the transition and is obviously fully available to address any questions you might have. And so I'd like to conclude this presentation here and open up the Q and A session.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session for investors and analysts. No questions. This concludes today's question and answer session. I would like to invite Mr. Daniel Sonder to proceed with his closing statements.
Thank you, everyone, for participating, and feel free to reach out if
you come up with questions later on. Goodbye.
That does conclude the B3 audio conference for today. Thank you very much for your participation. Have a good afternoon and thank you for using Carusco Brazil.