Ladies and gentlemen, my name is Miguel Diaz. On behalf of WOOD & Company, I'm very pleased to welcome you to the fourth quarter 2022 conference call with the Warsaw Stock Exchange management. Today, the company is represented by Marek Dietl, President of the Management Board, Izabela Olszewska and Adam Łatkowski, members of the Management Board, as well as Piotr Listwoń, Vice President of the Management Board of the Polish Power Exchange. Without any further ado, Marek, please, the floor is yours. Thank you.
Thank you very much for the intro, and thank you very much to all of you who joined us today. I'm not sure if you see my video. It's on? Yeah. Okay. Now it's on. Good. Let me briefly summarize the year 2022 as the full quarter results are also the results for the whole year. It was a year of polycrisis. Rarely the history you can sense so many headwinds for the business as such and for the exchanges business as well. War, increase of interest rates, and so on and so on. Despite those headwinds, we were quite happy with our revenues.
We were just short of our record high 2021 only by 4-4.5%, what I perceive as quite a nice result. We also kept control over our costs. The increasing costs were actually lower than the inflation rate, taking into account extreme tight labor market in Poland and our constant war on talent, is a good result. We also delivered nice profit. My internal target is to go beyond PLN 150 million, we missed it just by PLN 5 million, EUR 1.1 million. We are very close to my internal target and with a decent profit margin of over 37%. We also kept on paying relative attractive dividends.
Dividend yield was around 7.5%, and in total numbers, we paid out over PLN 115 million in the dividend, what is one of the highest dividend payouts we have ever had. Despite this turn noise and the geopolitics, we had quite nice trading volumes, especially in the first half of the year. We are well above the pre-pandemic levels, some of the progress we've made over last years stay with us. We also emphasized in our strategy 2018-2025 derivatives, we had the highest futures trading, derivatives tradings since our IPO in 2011.
We also had reasonably high ETF trading volume turnover of PLN 1 billion. It might sound not that much compared to the other exchanges, please take into account that our ETFs are not UCITS compliant, so they are not investable by the global investors, so it's solely based on the Polish retail ecosystem. We also had the highest SPO value since 2017. Another proof that it's worth to be a listed company. You can flexibly structure your capital. The SPO, SPOs is very good proof of that, of over EUR 2 billion were raised through this form of financing. Finally, we completed the acquisition, formal part of acquisition of Armenia Securities Exchange.
The docs were have been signed already earlier. Formally, we achieved a controlling majority in this in Armenia Securities Exchange. We were also happy to launch GlobalConnect in a MTF form, we list global companies and slowly and steadily we increase the number of available names on our exchange. Yesterday or the day before, we added 2 another names, so we will offer more global companies on our venue for our local ecosystems. We are also pleased with our GPW Logistics. It's a digital trade company, which was working very hard on the revenue side, and they were successful in getting 2 important clients. What...
Three, sorry, three important clients were translated already this year for revenues and small profit for the company. Actually, one year after we started this project, the company is already profitable, what we believe is a really short time to market. We are in the center of the greatest reform of the Polish financial market. It's a benchmark and reference rates reform related to replacement of Warsaw LIBOR, Polish LIBOR, with a transaction-based reference rate, which is called WIRON. It's our subsidiary, fully owned subsidiary, GPW Benchmark, is responsible for that. That allows us to offer a great variety of new data product, index product, benchmark product, reference rate product.
It was a great investment for future and also we were to develop our data business in the upcoming strategy. This was the summary glance, what was how was the year 2022 at our end. I would like to ask Izabela first and then Adam to present you with first our business update and then our financial highlights. Thank you.
Hello, I'm Izabela Olszewska. With the next few slides, I will take you through the business part of today's presentation, and I will focus on financial market. At the beginning, let's start with the cash market. As our president has just mentioned, 2022 was a really demanding year for us. It was the year marked with the war and its effects in the economic complex. I mean, here, energy crisis, high inflation, increase of interest rates. Looking at the just annual basis trading volume fell by several high percent in relation to the record year, 2021. It was minus 8.9%.
Taking into consideration these all circumstances, in my view, it is not bad result because we operated in extremely unfavorable conditions which were around the stock exchange. However, the single fourth quarter of the previous year, 2022, was worse significantly comparing to the fourth quarter of 2021, when we have more favorable conditions like low interest rates and still positive COVID period effects. I mean here, especially the interest of our individual investors. Decrease the average session trading volume and also average fee mean for us a higher share of liquidity providers. I mean, here, HBP, HVF, and also market-.
Iza online shortly. That would be my suggestion that maybe I take over.
Yes, please go ahead.
Just to observe the time limits of our guests. Basically, what I already mentioned is the ETF story. At the beginning, it's gaining a little bit of traction despite this regulatory constraints. Also what I mentioned was last year was the year of SPOs, when we look in the past, there were some IPOs already happening on our venue. If you think about European-wide lack of IPOs except of Porsche, which was the huge IPO, we still performed quite well with few new listings on our main market and a few companies joining our junior market, NewConnect. If I can ask for the next slide, please.
First of all, we also would like to mention is our derivatives business. It was, it's grown quite substantially over year of the year, plus 22%. Of course, the extra extra volatility helped in growing this business, but also we introduced some new derivatives, and also we were very active in promoting existing ones. It looks like it pays back. Especially that our futures, our blockbuster product, WIG20 futures turnover volume actually decreased, so we see more and more investors accepting our new new products and breadth of our offering. We're also very happy with our High Volume Provider, High Volume Funds programs.
They share in total, futures trading increased from 7% to 8%. Its liquidity always, and those guys provide us liquidity. This program is overall, we believe a major, a major success and we gonna continue. If I can ask for the next slide. We also invest quite heavily in the ESG strategy and in many aspects. First of all, we are, we implemented our ESG strategy. We want to, in the space of Scope 1, or according to Scope 1 and Scope 2, we are trying to reduce our energy consumption and reduce consumption of commodities as such.
Despite our company, we do not have major ESG challenges. We also try to help our issuers. We promote the leaders on in the leaders in the ESG field from our issuers, just to give the role models for the people. We publish ESG guidelines. We have, we attach ourselves to the Green Bond Framework to help our issuers to issue green bonds. We have also conference like ESG Warsaw, and we are very active in different bodies related to sustainable finance. We also try to be a role model for other issuers. We also try to show what we do as a company for others.
We, for example, integrate ESG risk into our risk management system, one of the first companies to do this on the Warsaw Stock Exchange. We have strong partnerships, including Sustainable Stock Exchanges Initiative and United Nations Global Compact. We have a product, ESG related product, is WIG-ESG. Our 60 top names, but weighted by the ESG factors. If I can ask the next slide, please. Financial performance. I think, Adam, maybe you're gonna step in here to present our investors with the financial performance. Thank you.
Yes, of course. Can you hear me?
Yes, we can hear you.
Hello? Can you hear me?
Yes, please go ahead. The line is open.
Yes, thank you. Thank you, Marek. I'd like to say that the last year with uncertainty was a big challenge for us, also in terms of profit management. As a result of lower turnover on both financial and commodity markets in 2022, consolidated sales revenues of the GPW Group amounted to almost PLN 390 million, which means a decrease by 4.5% year-over-year. Mainly due to high inflation, operating expenses increased by 11% year-over-year to almost PLN 265 million.
As a result of a decrease in sales and an increase in costs, the CA ratio reached 65%, and EBITDA fell to the level of PLN 167.4 million. In Q4, we recognized two significant one-offs. First was taking control over AMX Group, and the second one, impairment loss on bonds for goodwill. Net profit decreased only by 10% due to higher interest rate, which supported financial income and the net profit of our sister company, KDPW. The next slide, please. 2022 GPW Group's EBITDA margin decreased from 61.3% in 2021 to 44.6% at the end of last year, but still was relatively high.
While the net profit margin increased from 38.5% to 41.2%, thanks to one-offs I mentioned before, and higher financial income recorded in Q4 2022. Next slide, please. Revenues on financial markets. Revenue from our core business line decreased 21.5% year-over-year, mainly from shares trading, while listing revenue increased by almost 29%. Revenue from information services remained almost unchanged at the level of PLN 14.6 million. Next two slides are dedicated to the currency market. Now it's TGE turn. Piotr, the floor is yours.
Yes, thank you. Thank you very much. President of Polish Power Exchange. I'd like to give you a presentation about 3 slides about commodity market. In the context of commodity market, both electricity and gas, it should be recalled that these markets in Poland have been operating since second quarter and third quarter of 2022 with certain restrictions related to the regulations like price caps of electricity and gas traded on the wholesale market, including exchange and abolition of obligations to trade of energy and later decreasing the level of obligation to trade on the exchange on the gas market from 55% to 30%. These are very important 2 regulations that were implemented last year and have impact on the trading volumes till now.
Uncertainty members about the continuation of these regulations in 2014. Uncertainty about the geopolitical situation that have influenced the price of coal, CO2 emissions and gas. All these three factors terawatt-hours, that was a decrease of 65% year-on-year and almost 35% quarter-on-quarter. A steep decline of power forwards instrument was accompanied by the moderate growth in spot market volume, which reached 8.7 TWh and rose almost 3% year-on-year. At the same time, in line with the most common path of the seasonality, it increased by almost 20% quarter-on-quarter. The year-on-year growth was the result of high December turnover in line with implementation trading for Slovakia border on intraday market and with higher continuous trading day-ahead volumes.
From the perspective of the gas, the trading volume in the first quarter amounted to 43 terawatt-hours. It increased over 74% quarter-on-quarter. Natural gas for what instruments turnover was still vulnerable to extreme high prices and clearing margins. The second most important factor was a high risk of reduction of obligation of exchange, as mentioned at the beginning, that concerns specific companies, and this obligation was reduced finally in December from 55% to 30% starting from January this year. However, it has, as mentioned, an impact on how the members behave and already stopped trading so much as it was before on this, on this market. The volumes in the RES certificates market quarter-on-quarter basis are still to 5 terawatt-hours.
Year-on-year slight decrease to almost 30%. A decrease occur due to low volume of certificates issued by the Energy Regulatory Office and rising prices in session contracts. The last one, white certificate, which are the energy efficiency property rights. Trading volumes about 25 kilotonnes of CO2 equivalent in fourth quarter, which is decreased year-on-year by 4.6%. Compared to third quarter, it's increased by 37%. The main reason of lower trading volumes year-on-year is the volume of white certificates issued by the previous quarters that had its impact only on trading in October and November, decreased by 31% year-on-year and 23% respectively. May I have the next slide, please?
The revenues achieved in the fourth quarter directly result from the trading volumes just presented on the previous slide. The total commodity market revenues decreased by over 16% year-on-year. However, increased by 6% quarter-on-quarter. That stems from the low trading volumes on the electricity market and significant decline in certificates trading volume. Also due to change of required level of translation of certificates by the trading companies from 18.5% to 12%, mainly.
Also we see the increase, what is very important to mention, we have increased the other fees by 24% year-on-year, to 5.5 million PLN, mainly due to the higher revenue of interest on the management of assets of clearing guarantee system as a result of higher average annual balance of assets posted by members as collateral to guarantee system in 2022. The next slide is revenue from clearing and revenue from operations of the register. In the fourth quarter, we recorded a decrease in revenues from the clearing to the level of 10, almost 11 million PLN.
It was driven mainly by the lower volumes of clear transactions in the electricity and gas forward markets compared to the 1st quarter of 2021, as well as lower than overall volumes of rest of the rights as mentioned on the previous slide. We noticed drop of almost 11% quarter-on-quarter in the revenues from the operations of our registers, which results in lower volumes of renewable energy certificates issued by the Energy Regulatory Office. The last one information is the in the 4th quarter, the trading volume of certificates of origin from renewables energy sources amounts to 11.3 terawatt-hours. It's a growth of 26% over 26% year-on-year and 19% quarter-on-quarter.
As it was also growth compared to second quarter of 2022, it became a record-breaking turnover just until this year, first quarter of 2023. Thank you very much for listening, and I give my voice to my colleague from Warsaw Stock Exchange.
Thank you, Piotr. I'm coming back with operating expenses. The next slide, please. Yes, go. High cost margin in Q1, on the chart is the annual fee, payable for Polish market regulator, in each first quarter of a given year. An increase of operating expenses in 2022 was driven mainly by rising external costs of IT infrastructure and advisory services. Operating expenses increased slightly due to lower annual bonuses and reversal of the provision for social benefits, as you can see on the chart below. The next slide, please. Profit of entities measured by the equity method.
As I mentioned before, in the fourth quarter of 2022, we achieved a higher profit from our share in KDPW, and it was PLN 2.7 million more compared to fourth quarter of 2021. The last slide, please. Thank you. In the consolidated balance sheet at the end of 2022, you can see there are assets and liability reduction as a result of redemption of bonds in amount of PLN 125 million, and acquisition of the AMX Group. As I said, it was the last slide in this part of presentation, so thank you for your attention.
Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you have any questions, please press star 2 on your keypad. That's star 2 on your keypad. If you're dialed in via the web, you may also ask a voice or text question. We'll now give a moment or so for any questions to come in. Okay, we have a couple of questions from Mr. Miguel from WOOD. Please go ahead, sir, with your questions. Your line is open.
Hi. Hello. Can you hear me?
Yes. Please go ahead.
Okay. First and foremost, congratulations to the Warsaw Stock Exchange on achieving such strong results despite the very challenging year. I have a couple of questions. Maybe I'll start with the top line. I understand that the utilization of the discount schemes has increased in the past couple of months. Is this a trend that is expected to continue? Should we expect some level of deterioration of aggregate average fee in the equities trading? Also if there are some efforts or measures that are being taken to make the top line a bit more resilient to market and investor sentiment volatility.
I would like to ask some on the OpEx, did I understood correctly that one of the reasons for the maybe at least it might be better than an expected result was the reversal of provisions for Social Security, if I understood correctly? Just on guidance, I understand that you are still to unveil the strategy for 2023 until 2027 in May or June. Is there any color that you can provide at this point? Yeah, maybe also on strategy updates, if there is already a defined date for the presentation. Yeah, thank you.
Can you hear me? Can you see me? Okay, good. Well, maybe I will tackle the strategy and top-line question, and I would like to ask Adam to cover OpEx question. Top-line question is, there is indeed erosion of our price, which is also related to increased share of the High Volume Provider in our... We have Izabela back? No, we can't hear Izabela, so I will continue. Okay. Basically the increased share in the trading volumes for the High Volume Provider and High Volume Funds in expense, for example for retail, results in the short, low average fee. Those liquidity providers provide us liquidity, which is great, but also they pay much lower fees. It's a kind of a service they offer increased liquidity.
We hope that we are going to recover also some of business from our retail and for other investors than market makers and liquidity providers. But we also see some limits to our growth in our core business. That is why we will propose strategy which is, and it will come in a few weeks from now, which is mainly driven by our focus on our core business. But it is, it is, it also shows a slightly different approach. We will focus more on data space and more on the issuer side, because in this aspect we see much greater growth potential than compared to the trading, which is very volatile and unpredictable.
Also there are some limits to the growth in this area. Also the price increase in this area is very difficult as it's very competitive space. That's about the strategy. Pretty soon you're gonna learn more. Hopefully, you're gonna join us for the presentation of the strategy. Adam, over to you for the OpEx question.
Yes. Q4 2022 and the whole 2022 was driven by higher external services, mainly related to IT infrastructure and advisory, and lower total employee cost. I would like to ask Piotr Kajczuk to give us more details about this topic.
Yes, I will give more color on this topic. Slight change on the salaries year-over-year. It was due to two factors. First one was the provision, which we set up in 2021 against the social benefits of employees involved in our project, new trading system. During the 2022, we changed the qualifications of those employees from employees to B2B contract. We resolved this provision in value of PLN 3.2 million. We set up a provision in line taxes against VAT regarding those B2B contracts in value of, as I remember well, PLN 1.5 million. It was about half of the previous provision.
Second factor, it was the lower provisions for the annual bonuses due to the lower profit in 2022 comparing this to 2021.
Mm-hmm. Okay. Understood. Thank you so much for the added call. Thank you.
Thank you.
Yeah. I think maybe I would just finalize it, giving you the opportunity to maybe talk about any new project that is coming live this year. We already have, like, the logistic hub coming live. Is there any other project that is coming live this year?
With our dynamic edge insertion, we have recently appointed the board of this company. Technologically wise, we are more or less ready, and we start the test with the broadcaster of the TV signal. Emitel, there's a company which is hosts 80% of the market share in this area. The main task of the board of the separate co-company, GPWDAI, is to commercialize, to start working with the broadcasters, with the marketing teams of large advertisement brokers and so on. We will be having this commercial, first technical test and then commercial test of our dynamic insertion. Insertion initially.
Okay. Understood. Thank you so much.
Thank you. Maybe we'll give an opportunity for anybody else to ask any additional questions. If you can press star two on your keypad. That's star two on your keypad for any additional questions. You may ask a voice or a text question if you are dialed in via the web. It looks like we have no further questions at this point. Perhaps I'll pass the line back to the management team of the Warsaw Stock Exchange to conclude the call.
Can you hear me? Can you... Say... Okay. Good.
Yep.
It works.
Go ahead.
Thank you all for your time and listening to our fourth quarter and 2022 results. We hope to see you soon in the strategy presentation, and you will learn more of our on our plans, on our dividend policy and all the hot topics looking forward. Thank you for today, and hopefully in a few weeks from now, we're gonna have another chance to interact. Thank you, and have a great afternoon. Thank you.
Thank you. Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you. Goodbye.
Thank you. Bye-bye.
Bye.