Piotr Borowski, Member of the Management Board, and Piotr Listwoń, Vice President of the Management Board. Now, I would like to pass the floor to the management.
Thank you very much, Pavel. Just, I hope you have a presentation in front of you, so let us quickly jump to the slide number three, where I would like to summarize the key results from the second quarter 2020. So we have a very healthy EBITDA of over PLN 63 million, what is +10% compared with last year. We have very good net profit of PLN 43.5 million. It's again up from the last year. We have some good cost income ratio of 44.5%. And two days ago, we paid out dividend of PLN 2.4 per share.
Beside the healthy business performance, we have we also progressing in our strategic initiatives according to our strategy, GPW 2022. So we extended the Analyst Coverage Support Program. We added 12 companies to this program in response to research, and we also gained a fine sales distribution partner for the research. The research is also available in English, so I hope you will find it useful when you're investing in Poland and to the Warsaw Stock Exchange. We also pursue our pre-IPO program with our subsidiary, GPW Ventures, when we got the first investor. It's a Polish agency for support of agriculture, and we will partner with them in establishing the pre-IPO plan for agritech businesses.
We keep on working with the global institutions on ESG issues, and we started a program with EBRD, which will help the listed companies to do reporting on their ESG activities. It will be beneficial for the global investors community, as they will be best informed about the ESG efforts of our issuers. And last but not least, we received another free grant from the National Centre for Research and Development. This time is for a blockchain project, and we would like to use blockchain to trade tokens and smart contracts on non-financial assets.
We believe that the digitalization of assets and also going into the space of non-financial assets is a very promising space, and we are happy that we received over PLN 8 million in free funding. The total project is for over PLN 12 million, and now I'd like to pass to Izabela for a business update on our recent performance in Q2. Thank you.
Good afternoon, it's Izabela Olszewska speaking. We are now on slide four, and as a part of the presentation of business insights from financial markets, just I would like to start by looking at the turnover on European stock markets. The percentage increase in turnover on the Warsaw Stock Exchange year to year was one of the best in Europe. Of course, certainly we need to have in mind a base for calculation as we calculate percentage. But of course, anyway, that is a very good achievement, and we think that the growth dynamics of our turnover they were really, really good in Q2 this year.
Also, turnover velocity was very high in the whole history of our exchange, but also on the European background, and we are among the biggest name in Europe. When we go to the slide number five, so this is about the investor activity on our equity market, and the value of central order book trading on both our main market and the NewConnect market were record-breaking in Q2 this year. Among indices, the greatest increase was recorded by our index of smaller caps, sWIG80. It was more than plus 30% and it corresponds to the observed growing share in trading of retail clients.
So the, our retail clients, they were really interested in trading of, smaller caps, especially those companies that, operate in sectors resistant, to COVID, like, gaming sector, biotech, new technologies, healthcare sector, or e-commerce. So in, Q2, we noticed, a few external factors. They attracted the interest in stock exchange. And I would like to mention, first of all, the ultra low interest rates in Poland, which together, with the inflation rate, they caused, the situation where keeping savings of Polish citizens on bank deposits, they were, inefficient. So, so the new clients, just we observed the flow of new clients to the market, and they discovered, that there is a great possibility to earn money on our exchange.
The brokers opened more than 17,000 new accounts in the first half of this year. But the very important message that I would like just also to pass to you is that despite of good external factors, there are other factors that contributed to the current positive quarterly results, and this is the continuous work of our exchange on new products based on education and on liquidity support programs. As far as the products are concerned, I would like to mention structured products. And we observed a growing interest in structured products. We have currently more than 1,600 different products. The most active in Q2 were those based on German index DAX and crude oil.
But we have also various categories of structured products, and for every investor, despite of the level of risk appetite, the passive investment is still growing in Poland. And when we look on ETF turnover value, so you can see that this is the huge growth year to year, so we are going to add more ETFs. Also this year, we expect a new two ETFs or three, even three. So of course, the palette of these instruments will be growing on the market even in this year. The side of education activities, so we organized a lot of product education to our investors.
Also, we organized a Passive Investment Conference, and there was Innovation Days. The last one just gathered more than one thousand participants among retail clients. As far as liquidity support programs are concerned, so of course, we continue with the High Volume Provider Program, and the new participants of these programs joined us. One of the cash market participant joined the High Volume Provider Program and one HVP participant added cash market to its operation. So we can see that the share of HVP participants in equity turnover was slightly lower than in Q1. However, in the nominal value, their activity was bigger than in the previous quarter.
Let's go to the slide number six, and this is about derivatives market. On the derivatives market, volatility is the king. In Q2, we had still high levels of volatility, so WIG20 volatility was on the level of almost 36%, whereas the VIX volatility was on the level of 32%, so it resulted in again the high volumes on derivatives market, slightly lower than in the first quarter, but in the first quarter March was extremely active because of the start of the pandemic, and very high activity of our investors on derivatives market.
Most active products, they were index futures and single stocks futures. And again, on this market, we have a couple of liquidity support programs. So, we are proud that the new derivatives market maker joined to this market. And also, HVP participants, they increased their activity and, the share in turnover in Q2, it was on the level of 14%. So, thank you. And I pass the floor to Piotr Borowski.
Thank you, Izabela. It's Piotr Borowski speaking. Now, I give you a short overview on financial results. In the second quarter, we had a very good financial results because of this increased market activity on our markets, especially in financial markets, so the sales revenues increased by 13.5% year on year, and were mainly driven by high revenues on the financial market. While operating expenses increased moderately only by 4%, and this increase was driven by salaries and other employee costs, which is connected with our growth strategy, with strategic projects that are now in our pipeline. EBITDA increased by almost 10% year-on-year, while net profit amounted to 43.5 million zlotys and increased year-on-year 2.2%. Now we are moving to the slide 9.
These good revenues and more or less stable costs resulted in a very high EBITDA margin at the level of 62.5% and high net profit margin at 43% in Q2, 2020. On the slide 10, trading revenues on the financial markets rose by 54% year-on-year, and we observed very positive trends there. Very positive information because the average daily turnover in shares increased from less than 1 billion zlotys per session in the first quarter to 1.2 billion in the second quarter. The daily volume was much higher in the second quarter, but also the average fee we charge on the trading transactions was higher than in the first quarter. At the end of Q2, it was 2.31 basis points. This was the result of higher activity of retail clients.
We had much more orders and transactions generated by the retail clients, and normally they post smaller orders, smaller trades. And smaller trades means we earn more per trade because we charge more for the relatively smaller trades. It's connected with our fee structure. So the smaller trades generally are more profitable for us. Let's jump to the slide number 11. Listing revenues. Listing revenues were down, decreased by 25% year-on-year. Well, the listing revenues are influenced by the number of listed companies. So we had some delistings, so the number of-
Hello?
The number of companies listed on the stock exchange decreased, and also the valuation at the end of the last year was lower, and the valuation is the base for the calculation of the annual fees for listing, but looking forward, we are quite optimistic. We see much more activity also on the primary market, so we expect some big and small IPOs in the coming months. Slide number 12. We had... we have quite stable growth of revenues from information services, from information products like indices and market data. It's a stable and modestly growing business. We see new data vendors and new end clients, especially the number of individual investors increase. So they are active on the market, and that's why they generate demand for information services, for market data.
Now I ask Piotr Listwoń from Commodity Exchange to talk about the commodity business line.
Okay. Thank you. Hello, everyone. First, let me present to you turnover in Q2 2020. Three main commodity business lines run by TGE, which is electricity, gas, and property rights markets. I would like to turn your attention to the fact that trading volumes in derivatives for both electricity and gas markets, which accounts for 86% of shares in total volumes traded on the energy and gas markets, are used to be influenced by the seasonal trading behaviors. It means that volumes in the first half of the year are usually smaller than in the second. You can find confirmation of that in the volumes shown on charts for each quarters of the year. Same situation happened in the first and second quarter of 2020.
Both are on the very close level year-on-year on the gas market, and even improved by 18.8% on the electricity market, what was driven by the high price volatility caused by the COVID situation. On the property rights market, after significant drop in first quarter of 2019, caused by the end of trading in cogeneration certificates in June last year, we are observing steady increase in volumes quarter on quarter. Volumes in second quarter are usually higher than in other quarters, because through June, all obliged entities needs to redeem their certificates of origin. In terms of energy efficiency, turnover since third quarter 2019 edged down from 172 kiloton of oil equivalent to 66.4 in second quarter 2020.
It should be noted that so high volumes in second quarter and third quarter of two thousand nineteen were driven by the extension in June two thousand nineteen, support system of energy efficiency auction certificates until June, two thousand twenty-one. That regulatory move had huge impact on the level of demand and supply price volatility, and finally, on the volumes in Q2 and Q3 two thousand nineteen. Current level of the turnover is similar to the level in Q2 and Q3 two thousand eighteen, so 30, 53 and 60 kiloton equivalent respectively. If you go to slide 15, revenue from the electricity and gas and property rights market.
First, please bear in mind that revenues from commodity markets are strongly correlated to their turnovers, because fees are calculated upon the volume traded instead of their value. It is, as it is collected by the Warsaw Stock Exchange, that's why we may simplify that change in the revenues are correlated somehow with the change in turnovers. That's why total revenue in second quarter 2020 amounts to almost 63 million PLN. What means that increased 2.3% quarter on quarter and decreased 12% and 4% year on year.
Main factors which had the biggest impact on revenues comparison year on year basis, on which we should focus on, is significant drop of revenue from trading in property rights from 12.5 million PLN to 8.3 million PLN, due to this continuation of trading in cogeneration certificates as of thirtieth of June 2019, and decrease of energy efficiency certificates turnover, as I mentioned, before. Please, let's go, let's move to slide 16. Revenues from clearing. Here, again, we are dealing with the correlation between traded volumes and on the exchange and the clearing fees calculated per each megawatt hours.
So, we see decrease of revenue from clearing in second quarter to 11.4 million zloty, which is decrease 6.9% year on year, due to lack of volumes to clear from cogeneration certificates. Revenue from operation of the register increased in second quarter to 9.1 million, driven by an increase in the volume of issue and canceled RES certificates. Yeah, that's the. I mean, I think that's the main factors and revenues and turnovers in the commodity markets. So I pass voice to my colleagues for the next slide.
Piotr Borowski, are you here with us?
Yes, I'm again sorry, my connection has been broken. So can we come back to financials? Okay.
Yes. Slide number 18.
Yes, thank you very much. So the cost income ratio was at the level of 44.5%, lower than the second quarter, as a result of a higher sales revenues and stable costs. Depreciation was a bit lower year over year, lower by 3.6%. And there was an increase of salaries and other employee costs. The increase was 15% year on year, but almost zero quarter to quarter. This is because we employed the new contractors, new employees, new people to in our projects, strategic projects that we are now working on. So this year we had increase of revenue of employee costs, personal costs.
There was also a decrease of external services in the second quarter, where we had smaller costs of marketing, business trips, and external advisory services. In the second quarter, we created the provisions against the potential tax payable by our clearing house for the commodity exchange at the amount of PLN 2.9 million. Now we are in a discussion with our tax advisors to prepare the strategy because there are some doubts concerning the taxes, as there are discrepancies between the EU and Polish tax regulations. Also, we written off a part of the investment in our daughter company, Bondspot, which trades bonds, is a professional market. The write-off was at the level of PLN 3.5 million.
It was because we observed a decrease in trading on the treasury bond market, and we expect lower revenues this year than we forecasted. Slide 19, share of profit of entities, of associates. There was an increase, 21% year on year, and it amounted to PLN 4.4 million. It was driven mainly by the very good results by the net profit of KDPW. Our associate, it is a National Depository for Securities. They had a PLN 4.2 million profit in the second quarter when compared with the PLN 3.8 million in the first quarter of this year. Slide number 20. Our consolidated balance.
We can say that the first half was very good in terms of business and in terms of financials, and there was a very good healthy growth over financial assets and cash and cash equivalents. And we paid in August this year, two years, two days ago, we paid a dividend, PLN 2.4 per share. Thank you very much.
Yep, we are ready to answer any questions you might have at the moment, so please proceed.
Good afternoon, if I may start, Pavel in company. In fact, I have two questions. The first one is, you've mentioned that you started collaborating with EBRD in ESG field. Could you please elaborate a bit about this agreement?
Iza, can you answer the question?
Okay.
Uh-
The second question is, could you please share with us your considerations on the upcoming IPOs? So, how many IPOs can we expect this year and next year?
Again, Iza, if you can manage the question.
Okay. Okay, so let's start from the first question, so yeah, that's true, so we have started the project with EBRD, and this is the project related to ESG topic, so we discovered that the ESG is absolutely important trend in the market, and we would like to prepare our issuers for reporting according to the expectation of the investors, so we had some roadshows abroad and also within the global funds, and we, all of them, they inform us that from the next year the ESG integration will be on the level of almost 100%, so it's very important information.
And the companies that they will not report on ESG, they will go to the watchlist. And those who will report according to the standards which are described by foreign investors and our local investors, of course, they will be investable. So it is why we discussed it with EBRD and currently we are in the procurement process, and we are looking for the advisor who will prepare for us the guidelines for our companies how to report ESG for the investors. And we are the partner, and of course we have some financial contribution to this project.
As I mentioned, we received, we're in the process of procurement. We received some proposals, and now there is the evaluation of these proposals. And probably the winner will be announced very soon. So this is about ESG, absolutely important topic for us. Within the exchange, we adopted the ESG strategy, and we have a lot of plans related with the implementation of ESG within our company, and also helping our markets in the process of ESG factors implementation to their policies. And as far as IPO market is concerned, so we think that the rest of the year, it will be a good period for IPO.
So we had the public announcement from three companies that they are going to be listed on our exchange. So it is Allegro, which is the famous name, and game producer Huuuge Games, and also the company from our media sector, Canal+ . But also we expect several IPOs of small and medium-sized companies, especially from gaming sectors. And around 28 companies they announced that they are looking for floating on our NewConnect market. So we think that this will be a good time for IPO business line. And but also we expect some FPOs in the second part of the year. Thank you.
Okay, great. Thank you.
Any further questions?
Ladies and gentlemen, if you would like to ask any questions, please press star followed by one on your telephone keypad. It appears we have no questions on my side.
So Pavel, if there are no questions, I don't know if we continue or what is the plan?
No, I think we should conclude the conference call at this stage. I'm quite confident that if there are any further questions, investors can directly contact investor relations department.
So, so-
Thank you so much for the call today, and answering my questions.
Yeah. So on behalf of the management board of Warsaw Stock Exchange, thank you very much, and please don't hesitate to contact IR, our IR team or the management board. We are always ready to answer your questions you might have. Thank you very much.
Thank you.