Paweł, please go ahead.
Good afternoon, ladies and gentlemen. My name is Paweł Wieczorski, and on behalf of WOOD & Company, I would like to very warmly welcome you to the third quarter conference call with Warsaw Stock Exchange Management. Today, the company is represented by Mr. Marek Dietl, President of the Management Board, Mrs. Izabela Olszewska, Member of the Management Board, Mr. Piotr Borowski, Member of the Management Board, as well as Adam Młodkowski, Vice President of the Management Board. Gentlemen, please go ahead.
Thank you very much, Paweł. Thank you, all the participants. We appreciate your interest in our company. Let me start with a helicopter view on this third quarter. The revenues, EBITDA and net profit, especially net profit, were up on the year-over-year basis. Last quarter, we also paid our healthy dividend. Our dividend yield was over 5%, so taking into account current market situation, it's not that bad after all. Our results were partially due to the strong performance of our capital market in terms of indices and valuation of the companies. Actually, all our major indices increased last quarter.
Improvement in the valuation of the companies listed on our venue resulted also in more IPOs. Year- to- date, we had 26 IPOs and over a dozen of others waiting for the clearance of their prospectus by KNF. Not only the IPOs were strong, but also the pipeline is very healthy. We also improved or simplified the IPO procedure. We changed our regulation. We also worked on shortening the period from allotment to the listing. We try to improve the user experience when it comes to new listing. We were also busy working with our GlobalConnect project, which is basically listing foreign companies on our MTF. We also started the first version of our analytical co-coverage support program.
First two editions were a great success, and we continue with supporting of the research coverage of some smaller or medium-size mid-cap companies. We constantly improve this program, so more and more companies are covered. We also launched a new initiative which is related to dynamic ad insertion. We can think about it as a kind of auction of airtime, advertising airtime on linear TV. It is a kind of soft diversification from our core business into new area of media. We also had Three Seas Exchange Summit, especially this in October in Warsaw. We gathered all the CEOs of the Three Seas, so east part of the European Union.
It was a great conference, great achievement, and we managed somehow to sneak into a kind of pandemic gap, so we can have all the CEOs on-site in Warsaw, including the Austrian or Vienna Stock Exchange CEO and Budapest Stock Exchange, et cetera. We fully implemented our own index calculator tool on our venue. We have now complete solution for the exchanges which want to calculate their indexes on their own. We have technology and the know-how at GPW Benchmark, and we can have index factory if someone wants to outsource index production on us and/or we can help if a stock exchange, foreign exchange wants to build up their own indexes business.
This was in a nutshell, and let me now pass the mic, virtual mic to Iza and Piotr for more details.
Good afternoon. Izabela Olszewska speaking. It will be my pleasure to guide you through the business part of the financial markets presentation. As usual, I would like to start with the international look at the equity turnover in Europe, which is on the basis of FESE data denominated in euro. When we compare the nine months of this year and nine months of 2020, we can see that the change of electronic order books turnover is +12%, which places us in the top of the stock exchanges in Europe. I think that it's fair to say that in this comparison, the first quarter of 2021 had the greatest positive impact on the final result.
This first quarter was extremely good in terms of trading volumes. On our exchange, while the first quarter of 2020 was rather a quiet quarter. This was the quarter before the COVID time. Please, the next slide. The next slide is about investor activity on the cash market. The third quarter includes always two holiday months, which are always weaker. July this year was almost the same in terms of trading volumes like in 2020. August was weaker, but already September just was much better, and we observed the return of investors to the market and their higher activity.
All in all, the results are -3.5% year-on-year and almost -19% quarter-on-quarter. After three quarters of 2021, we had 11 debuts on the main market, including three transfers from our SME platform, NewConnect, to the main market. On NewConnect, we had 22 debuts altogether. As for now, it's 26 debuts. This is a very good year for the primary market, and we also expect new debuts by the end of this year. In the first quarter, we had also a drop in trading volumes on NewConnect. What reasons can we identify? The first one is the decreased interest of investors in COVID companies.
It was the main reason of huge increase of trading volumes on NewConnect last year. Also the other reason is the transfer of the biggest and the most liquid companies from SME platform to the main market. I mean here KPHR and Photon Energy, two relatively big companies as by the standards of NewConnect. I think that this is an absolutely natural phenomenon, and we treat NewConnect as a kind of kindergarten, and the transfer to the main market of the biggest and the most liquid companies it's really natural. The first quarter was another quarter with a significant development and growth of structured product segment. Also passive investment has been more and more popular on Warsaw Stock Exchange.
It's worth to say that we are going to do our best to increase the number of ETFs in our offer. This year we expect two more ETFs, perhaps this year or at the beginning of the next year. One of them will be based on a fixed income index, and the other one on sWIG80 index. This is the index of our small caps from WIG family. As our CEO already mentioned, we started the first edition of research support program. This program is very important for us because this is one of our ideas how to stimulate increase of liquidity on our market.
It covers currently 65 companies, and including six from NewConnect and 59 from the main market, and 10 investment firms producing research reports in this program. The exchange sponsor the reports and make them available free of charge to the wide group of investors. Our two programs, HVP, High Volume Provider and HVF, High Volume Funds, they've been operating with success and their share of the participants of this program on HVP are over 30% in 2023 this year. What make us happy is the increasing number of broker accounts and almost 14,000 more accounts year- to- date. Please change the next slide.
The next slide is focused on derivatives market. The third quarter on derivatives market was a little bit weaker than the previous one. It is because of the lower volatility. You have the graph presenting the volatility in the bottom on the left-hand side. You can see that the first quarter was a quarter with the relatively low volatility, and it had an impact on the trading volumes on derivatives in derivatives segment. Even here we had a 14% increase. I think that it's worth noticing the change of structure of trading in terms of products and clients. In terms of products, we can see the increase of FX futures trading volumes.
We started from the lower base, but currently there is increased interest on pairs with Polish zloty, especially U.S. dollar to Polish zloty. Also, we have a very good market maker and the quotes they're really narrow. The narrow spread on currency pairs, this is the possibility and incentive for investors, the possibility also of trading inside the spread of market maker. There's also the change of the investor structure on derivatives markets. As for now, 37% of trading volumes are generated by institutional clients, 34% by retail clients, and 29% by foreign clients. At the beginning of the derivatives, almost 100% belongs to the retail clients.
The market has been becoming more and more mature. The structure has been changing in the direction of more activity of institutional clients rather than retail clients. The change of trading structure and product structure impacts also our revenues, unfortunately in slightly negative way because futures contracts based on our flag s hip index, WIG20, there is a top margin contract.
In case of FX futures or single stock futures, we charge less. After nine months in this year, the revenues comparing to the same period last year are - 11%. We do our best to encourage new investors and traders in order to increase the scale of the market. Please change the slide. I would like also to comment on ESG because this is in our view a very important trend on the financial markets, and also we treat it as a business-oriented issue. Our role is twofold. One role is just to prepare our capital group.
Because Warsaw Stock Exchange is a public company, but also together with the whole capital group, we need to include in our strategies ESG factors. Also we need to be prepared for ESG reporting. Currently, we are working with external advisor. We have already implemented several policies related to ESG, and we're going to be ready with the strategy. The strategy will be a part of our integrated report for 2021. As a trade organizer, we do a lot to support the market and market participants, especially issuers, in just adjusting to this important trend.
I'd like to mention our new best practice of listed companies implemented in July this year. They incorporates ESG factors. Also, we organized a big conference, ESG Warsaw. We discussed a lot of things connected with ESG and ESG reporting. We have completed phase I of ESG Leaders competition. We have the companies and also physical persons which participate in this competition. Also, as I mentioned last time during this on the investor conference, we prepared together with EBRD, the practical guidelines on ESG reporting. They are especially dedicated to our mid caps.
Now, of course, we are planning to offer trainings around these guidelines. We plan some education on green bonds. The workshop for the potential issuers of these green bonds products. There are a lot of activities around ESG. I, as a person in charge of ESG at the level of the Management Board, realize that this is absolutely hot topic now on the financial markets. It is why we have a good attention to this topic. Thank you very much. Piotr Borowski, over to you.
Thank you, Izabela. Good afternoon, everybody. I'm Piotr Borowski, CEO and CFO of the Warsaw Stock Exchange. I will present briefly our financial results for the third quarter of this year. We are on slide number nine. The sales revenue of our capital group, which consists not only Warsaw Stock Exchange, but as you know, also the commodity exchange and the BondSpot and clearing house of commodities, increased by 1.8% year-on-year. Operating expenses were lower by 1.3% year-on-year, which makes a quite bright picture of this quarter because EBITDA increased by 3.4% year-on-year, and the net profit was on a quite high level, amounted to PLN 36 million and was up by 12.8% year-on-year.
If you look on the nine months of this year, the net profit is higher by 14.6% for the nine months of this year. The good result of this quarter was mainly due to the very good situation on the commodity market, which was combined with a lower activity and lower revenues on the financial market. Next slide, please. The third quarter, even though the equity market was relatively moderate, modest, we achieved a good sales revenue, up 1.8% year-on-year, and a healthy EBITDA margin at the level of 53.6%, and net profit margin at the level of 39.7%, which were higher than in the third quarter of the last year. Next slide. Yes. The trading revenue was lower in the third quarter year-on-year.
It was mainly due to the lower activity of investors on the equity market because the average turnover on this market was relatively low. It was PLN 946 million per session compared with PLN 1.3 billion in the second quarter. I can say it's a normal situation because during the summer the equity market is quite quiet, and it was, I mean, the situation we faced in the third quarter of this year. The average fee on the stock market was on the healthy level of 2.22 basis points, and it was higher than in the second quarter of this year. The slide number 12. Listing revenue was on a stable, quite high level of PLN 5.5 million.
It was increased by 21.6% when compared with the third quarter of the last year, and it was mainly due to the very active, very hot IPO market. Every quarter we have new IPOs and SPOs on our main market, but also on the NewConnect, and we are very positive and very optimistic about this revenue line going forward. Slide number 13. Market data. Market data is very stable business, developing very steadily. We are still acquiring new clients for market data, not only from the Warsaw Stock Exchange, but also from our subsidiaries like BondSpot, TGE and the GPW Benchmark, which is our index factory. In this revenue line, in the third quarter, we observed revenue higher by 4.7% when compared with the third quarter of the last year.
It's about the financials now, and I'm handing over to Adam Młodkowski , Deputy President of our Commodity Exchange, to present the situation of the commodity market.
Thank you, Piotr. Good afternoon, Adam Młodkowski from TGE speaking. We are on slide 15. At the beginning, I would like to say that third quarter 2021 was one of the best market periods in our history and in detail. In the third quarter, the volume of electricity traded on TGE amounted to 62.2 TWh compared with 53 TWh in the third quarter of 2020, and 53.4 TWh in the second quarter in 2021. This represents an increase by 70.4% year-on-year and an increase by 16.5% quarter-on-quarter. The time structure of contracts concluded in this market returned to the typical scheme before the start of COVID pandemic in 2020, when the first quarter was the best in terms of turnover.
Currently, the turnover is growing quarter- by- quarter, which was also supported by the rising prices on all EU commodity markets. High turnover was recorded especially on the spot market when the quarterly volume of 9.5 TWh was the second biggest in TGE's history. This means an increase by 10.1% compared to the previous quarter and by 12.8% year-on-year. High turnover on the spot market is influenced also by international flows on the day-ahead market after the opening of new connections on the western and southern border of Poland in June 2021. The wholesale price of electricity in Polish zone became one of the lowest in the EU.
Thanks to this, in Q3 2021, Poland became the largest exporter of electricity since 15 years. The volume of natural gas traded on TGE totaled 64.2 TWh and increased compared to the second quarter of 2021 by 74% and compared to the third quarter of the previous year by 82.1%. It was the result of high turnover on the forward market, which was record-breaking quarter with a volume of 60.1 TWh and an increase of 89.8% year-on-year and 97.7% quarter- on- quarter. Record-breaking turnover was the result of high demand on the gas market, low supply and contracting for the current winter season. Trading volume on the spot gas market amounted to 4.1 TWh and increased year-on-year 13.8% compared to Q3 2020.
While compared to Q2 2021, it decreased by 37.3%. The decline quarter-on-quarter is a natural seasonal effect, and Q3 2021 became the best third quarter on the spot market in the history of TGE. On the green certificates market, we've noted a decline year-on-year of 24.2% with trading volume 4.5 TWh. There was also a decrease of 37% to the second quarter of 2021. The decreases are a continuation of trends due to the introduction of the auction system supported by renewable sources of electricity in Poland started more than five years ago. In the past quarter, there was also a decrease in the liquidity on white certificates market. The supply of these certificates is still relatively low, which raises the prices.
The next slide, please. Revenues from trading. The revenues from trading on electricity markets in the third quarter of 2021 increased by 27.7% year-on-year to PLN 5.3 million. It was the result of higher volumes of the forward instruments market and higher spot trading fees which were raised since October 2020. The revenues from trading on natural gas markets increased significantly. In the third quarter of 2021, they grew by 79.5% year-on-year to PLN 5.2 million. Similar to the trading volume, as I mentioned before, due to the significant growth of the forward market. The revenues from the property rights market dropped in Q3 2021 by 24.3% year-on-year to PLN 4.2 million.
This comes from decline in trading volumes of green and white certificates. Of course, TGE has stable revenues from sources other than trading fees. In Q3 2021, they totaled PLN 3.7 million, which is an increase by 11.5%. The next slide, please. Revenues from post-trading service. In Q3 2021, there was an increase in revenues from clearing of 28% year-on-year. That amounted to PLN 12.3 million. It is, of course, the result of higher trading volumes on electricity and gas market, as I described in the previous slide. Revenues from operating the certificates of origin register amounted to PLN 4.9 million.
It means an increase of 26.6% year-on-year. This is mainly the result of higher volumes of redeemed certificates and traded guarantees. It was the last slide about commodity market in Q3 2021. Thank you for your attention. Piotr, you may continue your presentation.
Thank you, Adam. We are on the slide number 19, operating expenses. Cost-income ratio was at the level of 54.5% in the third quarter, and the operating expenses decreased by 1.3% year-on-year, which is quite positive, even though that in this year we will pay a higher fee for our market regulator. In the last year, the fee was PLN 13.8 million, while this year it will be PLN 14.5 million for our capital group. Salaries and employee costs were at the level of PLN 24 million, which was the increase year-on-year by 8%, while it was a decrease by 9.2% quarter-to-quarter.
We have increased costs in this year due to the new strategic initiatives, and they resulted also in a higher external services charges, which stood at the level of PLN 13.5 million external services in the third quarter, and it was an increase of 4% year-on-year and increase of 2.1% quarter-to-quarter, and it was mainly advisory services dedicated to our new development projects. Next slide, please. Share of profit of entities measured by the equity method, a very good result in the third quarter. Mainly our KDPW, which is a national securities depository, and KDPW_CCP contributed to this business line, and it was at the level of PLN 5.9 million, and sharp increase by 30% when compared with the third quarter of last year.
KDPW Group has a very good stable business, very favorable regulations for this group of companies, and high market activity resulted in a very good financial situation and results of KDPW Group, in which we participate as a Warsaw Stock Exchange. Next slide. Slide number 21, our consolidated financial statement. We can observe a still very high liquidity position, even though that we paid in August of this year dividend in the amount of PLN 104.9 million, PLN 2.5 per share. We can also underline the fact that there is an increase of the current liabilities, driven mainly by increase of liabilities in respect of the bond issue. So the part of our liabilities were reclassified from non-current to current status because our one of our bond issues expires in January next year.
It is the last slide of our presentation.
Gentlemen, perfect. Thank you so much for this presentation. I have a couple of questions. Maybe let's start with your considerations over OpEx and CapEx for next year. You've mentioned that you'll be working on two large projects. Would you mind discussing the OpEx and CapEx figures as you see for the next year and the cash flows distribution over time regarding these new two investment projects? Also, I am aware that there are some subsidies that you've secured for these projects. So if you could just mention the figures that you are going to spend, gross and net, adjusted for the subsidies. Thank you.
Thank you very much, Paweł, for this actually set of questions. I will give a short intro, and then I will let Piotr Borowski to explain some details. First of all, indeed, we're gonna start two new projects next year, and they will consume both CapEx and OpEx. Basically, we currently use our cash to finance this VAT for exporting of the energy and for our strategic initiatives. Our cash is put quite well into operations. The second thing, incremental OpEx and CapEx, some projects start and some end. For example, by the end of this year, beginning next year, we will finish the project, the GPW Data. Actually, net will have one new project coming into our operation.
For more details, Piotr Borowski, please, share your insights with our shareholders.
Yes, we launched two big new projects this year. The first one is Polish Logistics Operator, and the total budget of this project for the stock exchange is around PLN 19 million. For the execution of this project, we received a subsidy from the National Centre for Research and Development. The subsidy is PLN 5.4 million. It is more than 25% of our expenditures. This project will be executed next year in 2023, so in the next two years. We start from January of the next year. The second project is Telemetria. It's a very innovative platform based on dynamic advertisement insertion. It will be the auction system for the TV ads.
We sign contracts with the market operators and other stakeholders of this very interesting media market. The total budget of this project is PLN 33.3 million. The subsidy from the National Centre for Research and Development is for the one-third. The subsidy is PLN 13.3 million. also this project will be executed in the next year and in 2023. in the next two years, we will have these two new projects in execution.
Perfect. As far as the OpEx and CapEx growth is concerned for the next years in round figures?
We don't disclose the exact figures, but we can say that it will be higher than in this year because mainly of these two projects, because most of the budget of these projects are in CapEx expenditure.
Okay. Perfect. My next question concerns the dividend. Volumes this year are pretty strong. Are you considering adding on top of the absolute minimum dividend per share that you have assumed in your financial forecast for the next year something? I mean, the absolute minimum level is PLN 2.6 per share. Will you consider some additional amount on top of this PLN 2.6 per share?
Piotr Borowski is our master of vault and keeps the money. Piotr, can you somehow elaborate on this concept of increasing the-
Yes. Sure. Of course. We execute our long-term dividend policy, which assumes that every year we increase the dividend at least by PLN 0.1. It means that for this year, in the summer of next year, we'll pay out at least PLN 2.6 of dividend. It is too early to discuss if it can be higher. It depends on many factors. We would like to say that in the months of next year, maybe there will be more information available, so we don't give any more comments about this.
Okay. Perfect. Gentlemen, last year was pretty strong in terms of IPOs. This year seems to be also immensely good. Today, STS announced its intention to float the shares at the Warsaw Stock Exchange. Could you please elaborate a bit more about the IPO's outlook for 2022? Do you expect many new companies floating their shares? Also, will these companies be only the Polish space or from the region? Are you in talks with any new Polish companies that can consider listing at the Warsaw Stock Exchange?
I will give a very brief intro and then Izabela. Izabela, are you online?
Yes.
Yes, you are. Perfect. I will then leave the floor to you. Basically, we are very busy meeting companies, and I had pleasure to meet some of them in person or via video conferences. We generally target so-called unicorns or potential unicorns. Some of them consider IPO pretty soon. Some of them are about to issue the prospectus. Some need another two, three years. Basically, Poland and region is very full of strong companies. There's also a tremendous growth of Polish venture capital industry, and venture capital firms are great provider of well-prepared companies, well fitted companies for IPOs. We are very positive.
As I mentioned in my intro, there's a dozen or even more of our prospectuses waiting at the KNF for clearance. Izabela, if you can. One more thing. Just this week, sorry, we had an IPO of a company which first we built up the relation with them via our training program, GPW Growth. We see that our the synergies between the strategic initiative, GPW Growth, this training program for companies, was one of our strategic initiative, and we see now that it's converged into a real IPO. What is promising here is that we have a very structured process how to approach companies, and this rigorous approach to sales of our services results, gives, bears first fruits.
We hope that following conditions of GPW Growth will also result in the IPOs. Izabela, if you can chip in your comments, maybe some details on our primary market place activities.
Sure. I can only confirm what our CEO has just said. This is a very good year on the market. Of course we try to help the lock. Of course, we try to use this time with very good valuation and good interest of the companies in the Warsaw Stock Exchange. Of course, we have some bilateral meetings with the companies, but also we organize some events focused on potential new issuers like Warsaw Stock Exchange Innovation Day. These events, they gather the companies from innovation sectors.
We created the segment of family companies because this is the group of companies in Poland of our interest. We think that these companies that they can be the potential issuers on our stock exchange. Also we have a special program where it's worth being the public company, and there are many activities undertaken within the framework of this program. We expect some debuts by the end of this year. I hope to not only debut on NewConnect market, but also on our main market. Looking at the interest of the companies and also the number of prospectus with our securities commission, we do hope that the next year will be also good from IPO perspective.
Splendid. My last question concerns your latest project, which you've mentioned already during this conference call. I mean the addition of foreign stocks to your offer. The project was supposed to start in the fourth quarter. Could you please provide us with an update of when do you expect the foreign stocks to be traded at the Warsaw Stock Exchange? How many stocks are you going to add in the first tranche of this program? What's your ultimate goal in terms of the number of foreign stocks that you want to have in your offer?
Izabela, if you can elaborate a little bit on that promising project. Thank you.
Yes. GlobalConnect, this is the name of this project. It's our priority project. I can say that we have made a quite good progress in this project. As I mentioned last time on the investor conference, as a stock exchange, we will be ready with our operations aspects even in November. This is a kind of complex project with several partners. What is new now that currently we have end-to-end tests with the so-called introductory market maker, one of the investment firm, and also our CSD, and the results of this test will be known next week.
Last week, we received some comments and remarks from Polish Financial Supervision Authority on our rules and regulations. It's fair to say that there is no obligation to have our rules and regulations approved by the Polish Financial Supervision Authority. However, we would like, of course, to consider all the remarks and do our best to take them into account and include them in our regulations. The next thing is with our CSD, and they are waiting for approval of their rules, and then that in connection with GlobalConnect. But this is a quite simple change. I think that we expect that it is ready very soon.
However, the document approval process is still ongoing. The other point in the update is that we have signed memorandum with introductory market maker with one. The second memorandum is in progress. It looks that we'll have two introductory market makers very soon. They, of course, need to adjust their systems to operation on GlobalConnect. All in all, we still think that the start of GlobalConnect may be feasible this year, but because of some external factors, it can be delayed until the beginning of next year. We believe that we are on the home straight. This is the last stage of this project.
As I informed earlier, we showed that we'll start with some European names, and then we'll add the companies from the States. More difficult with the companies from the U.S.. However, I think that now we recognize the whole situation and regulations and we know what we need to have to bring these companies also to Poland in the sense, of course, of the trading on the GlobalConnect. This is the update, and I think that we'll have this market operating very soon, if not this year, so at the beginning of the next year.
Perfect. Thank you so much. I have no further questions.
Thank you very much. We'll perhaps open the line for any additional questions from the callers. If you have a question, please press star two on your telephone pad and wait for your name to be called. That's star two. If you are dialed in via the web, you may also ask a voice or a text questions. We'll now give a moment or so for any additional questions to come in.
There are no questions. I hope everything is well understood.
Yeah. It must be that. We'll just give another 15 seconds or so for any questions. Reminder, star two on your telephone pad. You may ask a text question as well if you are dialed in via the web. Okay. It does look indeed like everything was exhausted and well understood. I'll pass the line back to the management team for the concluding remarks.
Dear investor, dear analyst, thank you very much for taking time and listening to our presentation. Thank you to WOOD & Company for organizing conference and reaching out with questions. On the screen, you can see next IR events in just one and a half week, 22nd of November, or almost two weeks. Over two weeks, we'll have Santander Financial Sector Conference, which online, and in December, second week of December, we'll have Wood's Winter Wonderland WOOD & Company Prague Conference. In between, please feel free to ask any questions to our IR team at ir@gpw.pl.
Thank you for now, and I hope to see you or at least hear you even for our next results calls, video calls. We'll also organize a kind of a strategy review as next year is the last year of our existing strategy. We'll be summarizing what happened until now and working on the new strategy. Thank you very much for now and have a great evening. Bye-bye.
Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you.
Thank you. Bye.
Thank you very much.