Good morning, and welcome to this conference summarizing the Q3 results of the Warsaw Stock Exchange Group. The conference takes place in the traditional format, starting with slides, followed with your questions. We have CEO Marek Dietl. Members of Warsaw Stock Exchange management board, Izabela Olszewska, Monika Gorgoń, and Adam Młotkowski. Vice President of TGE, Piotr Listwoń, and Warsaw Stock Exchange's CFO. Over to Mr. Dietl.
Ladies and gentlemen, it's a great pleasure to start this presentation of our results. This was yet another quarter when our revenue crossed the mark of PLN 100 million. The figures at hand suggest that Q4 could once again bring revenue of more than PLN 100 million, which would be a great year. Below the top line of the P&L, our financials are equally strong.
EBITDA grew over 30% year-on-year, net profit 27.5% up, and we keep you, our shareholders, in mind by sharing our dividend, PLN 2.7 per share. In total, PLN 113 million distributed in dividend. What is equally important to financial results is our business outlook. In our core business, we continue to look for new sources of revenue. We have launched the first ETCs, Exchange-Traded Commodities, on physical gold, which is very popular with investors. We're happy to know that the financial instrument tracking a physical asset is so popular and attractive. Also, in terms of our plans regarding tokenization, this interest from investors corroborates our assumptions. We have launched new single stock futures and new stocks on GlobalConnect. Every new stock makes this new market more attractive.
We continue to put in efforts together with the market maker to launch new stocks. We have an up-and-running index factory. GPW Benchmark continues to produce indices for clients, and we can offer a lot of customized benchmarks, so our investment in technology is now starting to pay off. We continue to grow internationally. In the past quarter, we have focused on Ukraine and cooperation with its capital and commodity markets. We work together with Ukraine's Stock Market Commission and the EBRD. Then there's an agreement signed between TGE, IRGiT, and UEEX, a cooperation agreement, which is more than just the memorandum of understanding.
We're happy to announce that the Armenia Securities Exchange, AMX, our Armenian branch or franchise, has announced a new development strategy, which goes in the direction as intended to continue ensuring that this operator is fully professional. Our new business lines and technology continue to grow. GPW Private Market is very busy developing technology. We have been pivoting a lot of technology concepts on an experimental basis, and we have launched a first business on that platform. In Q4, we got the approval to operate as a crowd funding operator. GPW DAI, again, a major investment. We are happy to know that the technological development has, at the turn of the quarters, launched initial test-based advertising campaigns, and we also generated the first revenue. We expect that in the coming years, this company will unfold its business at the full scale.
We are also getting ready to implement GPW WATS. We have a program to support migration to the new data center operating with the global system vendor, Equinix, where our system, WATS, will reside, our new trading system. All these efforts have been appreciated. Looking at the stock performance year to date, we are on par with large players, up 19% in the stock price of the Warsaw Stock Exchange in total return basis, including the dividend paid. Behind only those markets where the companies were undervalued, and those markets that are growing very dynamically at an early stage of growth. After this longish introduction, I hand over to Izabela Olszewska and Adam Młotkowski, who will take us through the details of our financials. Thank you very much.
As usual, I will have the pleasure to present the financial market in Q3. I will take you through the performance across the three quarters, with a few comments on the outlook. The Warsaw Stock Exchange is not an isolated entity. We are one of the European markets. We have a combined client base, and so we are included in an interlinked European system, so it's important to look at the turnover and financials in a broader context. The first slide shows the broader context of performance in the European markets in terms of turnover, year-on-year change in electronic order book, shares turnover in euros. The data are sourced from the Federation of European Stock Exchanges, and a comment on the velocity ratio. As regards the year-on-year change in EOB equity turnover, the stock exchanges fall into two groups.
The biggest operators saw some decline in the nine months. At the end of Q3, year-on-year, those declines were rather sharp for NASDAQ or the Deutsche Börse or SIX. My comment is that we are facing a range of challenges in Europe. Macroeconomic parameters and the persisting armed conflict, war, in a neighboring country, both generate some concerns. Turnover should be considered from the perspective of this very demanding and difficult external environment. A growth story came from the US and other continents at the same time. Looking at the percentage year-on-year change, we're looking at a high base. 2022 is when war broke out in Ukraine, and that brought a lot of volatility and a lot of investor activity in Europe.
There are other factors at stake as well, but that's the overall picture, as you can see on the slide. The other group are much, much smaller markets, where the turnover base is low, so one-offs may impact the year-on-year change strongly. For instance, in Romania this year, there was a huge IPO this year of Hidroelectrica, EUR 2 billion, which obviously drove increase in turnover. On the Warsaw Stock Exchange, we are looking pretty good. We always compare ourselves to the bigger markets as our future and prospective benchmark. But in euro terms, our turnover grew 5% year-on-year. In zlotys, the growth was more flattish due to the exchange rate, but compared to the big, well-developed markets, we performed really well. On the right-hand side, you can see the velocity ratio. Again, we are reporting a high velocity as compared to the peer group.
The big exchanges are ahead, but the distance is small. We are working hard on the velocity ratio by defining and developing a range of liquidity support programs, which are working well, hence the high velocity. The next slide shows investor activity on the spot market. As I said, EOB equity turnover on the main market year-on-year grew 5% in euros and remained flat or stable in zlotys, dropping 4.8% quarter-on-quarter. However, bear in mind that Q3 is specific in that two months of the quarter are holiday months, which implies lower turnover. But I think we did pretty well this past quarter. Average EOB turnover was under PLN 1 billion, which changed actually in Q4. Now, one and a half months into Q4, we can see that the daily turnover is strongly above PLN 1 billion on every daily trading session.
The average trading fee, as compared to the previous quarter, which is our benchmark, remained rather stable, which shows that the activity of liquidity providers is really strong. In the performance of the important obligations, they use promotional fee rates, which impacts the next bullet on this slide. The share of HVP, HVF participants in turnover grew year-on-year, standing at 17.7% in Q3. That's almost PLN 11 billion in nominal terms, HVP, HVF programs. What we are proud of is NewConnect EOB turnover, which grew very sharply. Although over a long period of time, NewConnect turnover was falling, so we're happy to say that downtrend has now reverted. That's mainly driven by several companies representing more than 20% of overall turnover, the most liquid stocks, the biggest companies.
And that is actually the role of NewConnect, where companies grow and mature, and then the biggest and most liquid stocks migrate to the main market, which is one of the reasons why the last few quarters saw lower turnover on NewConnect. As for structured products, we report a significant quarter-on-quarter increase by 34%, with a less than 10% decline year-on-year. We have a very broad range of structured products. The most popular are certificates based on DAX, the German index, which shows that investors are looking for some kind of benchmark or reference to the German market. ETF turnover dropped year-on-year and quarter-on-quarter in Q3, but we are quite happy to report some good news.
First of all, looking at the chart, which shows the value of ETF turnover, you will see that, in aggregate, Q1 to Q3 were the best ever in ETF history. So now, after Q4, we expect to report possibly the best year in history. ETF assets grew largely year-on-year by more than PLN 500 million. Sorry, PLN 250 million, compared to PLN 330 million a year before. So despite some regulatory stumbling blocks, this segment is growing. Mr. Dietl said we have launched the first ETC based on gold, so that's it. As regards the support for investors, we hold a great number of events and initiatives to encourage investors to come to the market and invest the savings, including the Warsaw Structured Products Day, the GPW Innovation Day. These initiatives support turnover and liquidity.
Let me now turn briefly to the primary market. In Q3, there were no IPOs on the main market. There were three IPOs on NewConnect. But let's look at the broader horizon in Europe. In the European IPO market, we see that the market is still weak and dormant, although there were some IPOs over EUR 500 million and number of IPOs grew in Q3 compared to Q1 and Q2, which shows that there is some hope and some reason to remain optimistic looking forward. We will see how the situation unfolds, but the context is important. The lack of IPOs on the main market is not Polish specificity. We are part of European market, and the situation is similar across the board. But the secondary market, the SPO market, is performing very well.
Companies use the main market and NewConnect to raise equity in SPOs. The next slide shows derivatives. Let's first look at a key parameter regarding derivatives turnover, specifically volatility. Volatility was lower in Q3, much, much lower year on year, as well as quarter on quarter. Hence, the turnover volume dropped both overall and for our flagship product, the WIG20 futures. But looking at the time series, in the chart at the bottom of the slide, the turnover volume after the first three quarters of 2023 was bigger than the annual turnover from 2014 to 2021. So 2022 was a very strong year due to strong volatility, which drove strong derivatives turnover. But what is key is that, it looks like we have gone to a new level with turnover, which is now quite robust.
We also have the HVP and HVF programs, with a share of 5.3% in Q3 turnover, with liquidity providers generating about 38% of turnover on that market. The next slide shows a comment on our ESG strategy, which we are now implementing to reach the goals we have announced as we published the strategy at the end of 2021. We are running many initiatives to achieve our objectives. For the first time, our integrated report this year includes KPIs that we are looking at to evaluate our performance under the strategy. We are monitoring our emissions. We make sure that some of our energy comes from renewable sources. We educate our employees in ESG. We have made changes to our business car fleet, introducing hybrid cars and one electric car.
Importantly, under our strategy, we are focusing on ESG to address the challenges. The shortage of reliable data on ESG in the market, so the ESG Data Hub is currently in focus. We are working to make sure that the reporting and the data repository are truly effective. We have a number of activities addressed to the market with the guidebook for our listed companies on the Warsaw Stock Exchange. With the EBRD and a third-party consultant, we have updated our guide for companies listed on the Warsaw Stock Exchange, the ESG reporting guidelines, which are publicly available as an important repository of tools any company needs to implement its ESG strategy and start reporting. We take part in a number of programs with the Ministry of Finance and other partners.
The second edition of the ESG Leaders Competition is coming to close, and in our education and networking activities and the GPW Growth Program, we have launched a part of the program, ESG in Practice, and we are preparing the second edition of this course. Thank you very much. That's all from me, and I turn over to Adam Młotkowski.
Thank you very much. Ladies and gentlemen, our financial performance of the group in Q3 was very positive, as CEO Marek Dietl said in his introduction today. Revenue in Q3 was over PLN 106 million. We are happy to note that this represents a 20% growth year-on-year in Q3 compared to Q3 2022. The revenue mix will be discussed later when we turn to another slide, so now let's not dwell on it.
More on this later. As for expenses, our operating expenses, they also increased significantly by nearly 26% in Q3 2023, reaching nearly PLN 75 million. The cost mix, again, will be discussed in a moment. As a result, our EBITDA grew to nearly PLN 40 million, up year-on-year by over 36%. Importantly, both the expenses we paid in Q3 2023 and in Q3 2022 were burdened by some one-offs. Again, more on that later in this presentation. The net profit was the same as EBITDA, PLN 39.7 million, up 27.5% year-on-year. That growth was mainly driven by a very good performance of the Central Securities Depository of Poland, KDPW, our associate, impacting our P&L. Now, the next slide shows some details on the revenue mix on the financial market.
We used to present the three key business lines. We have now added a fourth, AMX, the AMX Group. As for our core revenue source, trading revenue, it grew modestly by 5% year-on-year, reaching over PLN 40 million in trading revenue. Now, the next business line is listing. Given the market situation discussed extensively by Izabela Olszewska, listing revenue dropped modestly, remaining quite stable, down only 0.2%, mainly due to lower revenue from listing fees, which were partly offset by an increase in revenue from fees for introduction of instruments. The third business line remains stable.
Revenue from information services, where we reported a small drop, 0.6% year-over-year, and a bigger dip quarter-over-quarter, because in Q2, the revenue was inflated by some amounts carried over from the previous period, so it's not directly comparable quarter-over-quarter. Year-over-year, however, the revenue remains stable. AMX, our new business line, this is a very stable, iterative kind of business. As you can see on the slide, the predominant revenue comes from the depository business. We had not consolidated the company before. We took control at the end of 2022, so when it comes to revenue and expenses, they have been consolidated only this year. So this is an additional new revenue stream. And the next slide presents the revenue mix in Q3.
PLN 106 million, broken down by financial market, which dominates. Nearly PLN 66 million comes from the financial market, under forty... Well, over 49%, including 5.6% from AMX, which now is presented as part of our financial market business. The second biggest segment is the commodity market. More than one-third of the revenue of the group comes from the commodity market, which is very diversified. The financial market shows a predominance of revenue from trading in equities, but there is also some diversification. Information services, nearly 14% contribution to the revenue. Finally, the box in orange, other sales revenue, mainly generated by the consolidated subsidiary, GPW Logistics, which launched its operating business this year and has been consolidated.
So in total, the new business lines contributed more than PLN 10.5 million in revenue, improving the diversification of our business. Especially if you compare the pie chart to the previous quarter, our diversification improves. More on revenue from the commodity market, over to Piotr Listwoń of TGE. Good afternoon. Thank you very much. It's my pleasure to present the performance, including turnover and revenue on the commodity market. As you can see on the slide, at the top. Both electricity and natural gas reported an increase in the volume of turnover year-on-year and quarter-on-quarter, despite the external circumstances, which were not truly favorable for the market to the markets in electricity and gas to expand. As for electricity, the obligation to trade on the exchange was lifted.
Work still continues regarding the integration of the coal-fired generation sources, which has impacted the contracting and the liquidity in the exchange. Market participants are still uncertain about the prices of energy commodities and uncertain about the regulation, which could be implemented next year, including laws freezing the electricity prices for end consumers. As a result, despite all these circumstances, the market participants actually reacted and traded quite well on TGE. As for electricity, the strong trading volume was mainly generated by the spot market, which grew 114% year-over-year and more than 8% quarter-over-quarter, and 1.5% over the record high spot trading in electricity in Q1 2023, which shows that uncertainty about prices shifts contracting from the forward to the spot market.
Regarding the gas market, turnover was smaller in the spot market and quite strong in the forward market, although the obligation to trade in gas on the exchange was reduced from 55 to 30%. Despite all that, turnover on the forward market was quite decent. At the bottom of the screen, you can see the turnover volume in property rights, the green certificates, and the energy efficiency certificates, which dropped unfortunately, year-over-year by more than 22% in green certificates and 5% in energy efficiency certificates. The drop in green certificates results in smaller redemptions, down from 18.5% to 12% this year. Next year, we are expecting a reduction of the requirement to 5%, which will impact turnover in property rights and the number of certificates issued in our register. More on that later.
The drop in turnover in property rights in RES and energy efficiency certificates is due to the fact that the concentration of turnover occurs in Q2, as obliged companies have to purchase certificates and have them canceled by the end of June. So obviously, the next two quarters, Q3 and Q4, bring less turnover. The next slide, please. Revenue of the TGE group is directly proportionate to the volume of turnover in the markets we operate. In Q3, we saw a solid revenue and volumes. In the electricity and gas market, revenue grew quarter-on-quarter and year-on-year. Revenue from trading in electricity was driven by raised transaction fees for spot and forward transactions alike, with strong turnover on the spot market, as I said before. As for the gas market, in addition to the additional...
The raised fees, total turnover grew both year-on-year and quarter-on-quarter, despite the drop in spot trading. Overall, overall revenue from the commodity market grew by more than 26% year-on-year and dropped quarter-on-quarter by more than 6% to PLN 20 million . The year-on-year increase was mainly driven by revenue from the electricity market, and the drop was driven by smaller turnover in property rights in Q2. The next slide and the other two business lines. Revenue from clearing, which stood at more than PLN 10 million in Q3, up by nearly 25% year-on-year, and a small drop of revenue from clearing quarter-on-quarter. That dip in revenue from clearing was due to the fact that the certificates were no longer as attractive for customers in Q3 as they had been in Q2.
But the year-on-year increase in this business line was driven by good volumes in the electricity and gas markets... especially the spot market in electricity. Revenue from operation of the register of guarantees of origin. In Q3, our revenue dropped by 28% to PLN 4.7 million, which is a natural consequence of the smaller demand for certificates in this period. But if you look at Q3 and Q4, 2022, the dip now is much less pronounced, but it is still felt due to what I said before, the lower requirement to redeem green certificates and the phase out of the support scheme for renewable energy sources, which had been added to the system recently. We said on other occasions that after 15 years, every installation is phased out from the system.
As a result, some of the installations are dropping from the system month after month. That's the commodity market. Thank you.
Thank you very much. Now, some detail on our expenses, especially OpEx, but also some overview of CapEx. Our operating expenses, as I said in the beginning, grew by more than 1/4 quarter-on-quarter. The chart at the bottom left-hand side shows that this was mainly driven by total employee costs, which grew PLN 9.5 million quarter-on-quarter, as well as external service charges, up PLN 6.7 million quarter-on-quarter. The total employee costs grew, and the amount of total employee cost in Q3 was more than PLN 38 million, up by more than one-third year-on-year. Why?
Well, the employee costs include an increase in salaries following raises we have offered under our remuneration system based on employee appraisals, the performance of their targets, and the market benchmark that we source through a third party. Another factor driving this increase in employee cost is a one-off inflation benefit that we paid. We did pay it in Q4, but we decided to pay it following a long process of negotiation with the trade union, concluded with an agreement signed at the end of Q3 when we set up provisions. So the impact of the one-off inflation-linked payment is included in Q3 financials. Let me stress that the negotiations were long. We exchanged a number of arguments with the trade union, so this one-off benefit we paid is slightly more than 5% of the employees' annual salaries.
So, compared to year-on-year inflation exceeding 1,000%, this is not a major burden for our results. We believe it's a win-win. This one-off was added to our costs. The third driver is an increase in our headcount across the group, mainly related to the implementation of our strategic initiatives, including a number of projects we are running, as the CEO said in the opening. But that is mainly due to the acquisition of AMX. We consolidated the salary budget of the AMX group. As for external services, those charges stood at more than PLN 25 million in Q3. The biggest percentage increase in our cost lines, 36% year-on-year. Now, that's driven by three factors again.
First, the consolidation of the costs of GPW Logistics, our subsidiary, set up to complement the PCOL project, and it will continue to perform the deliverables of that project. That's PLN 4.2 million. As compared to the previous period, when the company was launching with very low costs of 33,000 added to the cost of Q3, was the amount of PLN 4.2 million in full. And AMX's external service charges. AMX is another company we are consolidating. When I discussed revenue, I said that the consolidated revenue grew, thanks to the new business lines, including GPW Logistics and AMX, but that also reflects on our costs. The profitability of these companies is different. AMX has strong profitability of about 20%. GPW Logistics shows lower profitability. The third driver of external service charges are higher IT service costs.
These are significant amounts. We are a technology company, as you know, so the growing IT costs in the market above inflation impact our expenses. Turning to CapEx. CapEx in Q3 stood at more than PLN 16 million, with a small drop as regards CapEx to total revenue, 15.3%, but the amount of expenses we paid in Q3, as you can see in the chart, grew by almost PLN 2 million year-on-year. But we are expecting a strong increase in CapEx in Q4, anticipating an amount similar to what we paid in Q4 2022, which is around PLN 25 million. Let's flip the slide. Now, this is the share of profit of entities measured by equity method.
As you can see, at the bottom of the slide, the quote-unquote "change" came from KDPW, with the very good results of the Central Securities Depository, mainly driven by higher rates and higher capitalization of companies. We added PLN 2 million. Year-on-year, the growth was more than 23%. Something we are very proud of. The next slide shows the gist of all the changes I've discussed thus far. Our margins, as I said in the beginning, EBITDA grew by more than 37% year-on-year. Charged... We charged one-offs, however, especially in cost budget, we had the additional one-off inflation benefit. On the other hand, in Q3 2022, we had set up provisions against BondSpot. Now, BondSpot's results or performance is stable.
The company is profitable, so there's no need to impair the goodwill, but the one-off was charged to expenses in Q3 2022, when we also had paid donations to support Ukrainian refugees and the KDPW Foundation. Looking at the EBITDA margin, it grew to 37.4% year-on-year. The growth was four point five percentage points. EBITDA net of the one-offs that I have discussed also shows an increase. The net profit margin also improved to 37.4%, up by 2.2% year-on-year. As I said, this is mainly driven by record high financials of KDPW. At the bottom right-hand corner, you can see our results versus the market consensus. Revenue was very close to the consensus, slightly above. As for the net profit, it was markedly better, more than 4% above the consensus.
The final slide presents our balance sheet. Here, I'd like to draw your attention to what Mr. Dietl said in the opening. The dividend payment in Q3, in the amount of more than PLN 113 million, which caused a decrease in total assets, but the balance sheet structure is strong. The current liquidity ratio is close to 4. So the stability of the capital group gives us full comfort. Thank you. That's all from me....
Now let's open the Q&As. We have some questions that came online from Miguel Diaz, Wood & Company. Will the outcome of the October parliamentary election have a direct impact on your growth strategy and the composition of the Exchange's management board? And could it impact the broader outlook of the Polish capital market?
Well, I guess you are following the process of signing the coalition agreement, and with time, we will know more about the program and the personal decisions of the most likely new government coalition. For what we know now, from media speculations regarding the personal decisions, we expect that the most likely incoming government will be friendly for the capital market. We are not expecting a rerun of the pension fund reform with regard to PPKs. From media reports, we understand that the PPK program could possibly be only fine-tuned. We are not expecting any resolution to the offer transfers system, or maybe the plan has not yet been unveiled. So that's about the market. As for our company, we continue to pursue the strategy we adopted this year, prepared last year.
We see a wealth of opportunities for our group to grow. We are trying to steer or navigate that wealth of opportunities, focusing in particular on the WATS project and the thorough re-engineering of our technology to develop new products. 2023 also marks the end of the time horizon of financing from the National Center for Research and Development, so the technologies we have been developing will be gradually implemented in our companies, our subsidiaries, to release the management of the exchange of the responsibility for overseeing these strategic initiatives. That's where we're going with private market, GPW Logistics, GPW DAI. Following the conclusion of R&D, the deliverables or the solutions will be commercialized by the subsidiaries. GPW Tech has been doing so for a while, taking over some of the technologies we've developed.
So we will continue to make sure that our company continues to develop. That's our top priority, and to strengthen the capital market by expanding and enlarging our offering. Regarding HR, I guess any listed company has 26 days to call a general meeting. We are always at the disposal of our shareholders, and we always remember that a CEO is not a lifetime position, but for a while we continue to pursue our strategy, and the management is determined to work for your benefit, our shareholders, until the very last moment. We are not looking back. We are trying to serve the company and the Polish capital market best we can. Thank you. Next question from Miguel: What is the status of the key strategic initiatives under the new strategy? The new strategy...
Well, we don't have the time to go through all the initiatives, but the new strategy follows a different philosophy for implementing strategic initiatives. The previous strategy initially was focused on distributing or splitting our resources between operations and strategic initiatives. However, now, following the advice from my consultants, we are focusing in implementation on setting up special or specialized teams which focus 100% on the implementation of these strategic initiatives. And so at this time, we are opening space for these new initiatives. We are building those teams. We are rebuilding our project management system as advised by our consultants. When we have made more decisions regarding HR and planning, we kick off individual projects, and those initiatives are being launched one after the other. And we will continue to launch more initiatives in Q1, 2024.
So at this very early stage of all these strategic initiatives, they are all going according to plan. We are also willing to take advantage of the open innovation model. We have conceived an acceleration program. We have developed seven proof of concepts in the previous round. We are now aspiring to do more with third parties, so we're talking to many partners who could provide building blocks of the solutions we need. So we are generating innovation in-house and at the same time, starting in January, we want to open a call for open innovations. Thank you. And the final question on strategy, Mikołaj Lemańczyk, mBank: What is the status of the TEO Telemetric project? What revenue are you expecting from GPW Logistics and the Armenian Securities Exchange next year? Well, the status...
Well, Armenia, the Armenia Securities Exchange is an active business with a new strategy. It's developing according to plan, as advised by a consultant paid by EBRD. We are achieving the objectives assumed when structuring the deal, including the adoption of AMX's new strategy, which covers the strategic initiatives, which were planned at the time of closing the deal, plus some additional plans added later as we joined the operations of AMX. This business is up and running. GPW Logistics is also a running business. We will try to scale it up. By the end of December, the platform will be up and running. The company can use that platform, implement it, so it will be easier to scale up the business, and the cost of scaling up the business will be smaller.
We will be generating bigger volumes. We think we see that there is a need for that in the market, and the only limitations are imposed by our own capacity, because the platform is a transitional one, so it's a matter of scaling up, scaling up the business. Telemetry or GPW DAI, again, the platform is there. It has been tested successfully with ad insertion. Some revenue has been generated, campaigns have been launched, so we know that it is efficient, and we are in discussions. We have signed contracts with two partners, negotiating with more, and there is a lot of goodwill on the part of the National Broadcasting Council for our project. And the technology risk has been addressed. Regulatory risk has also been largely addressed, so next year, it's mainly going to be market risk.
So we have to meet the expectations of our potential customers. It's a two-sided market, in fact. On the one hand... Or three-sided market: infrastructure providers, broadcasters, and advertisers. So we have to negotiate or navigate that constellation, but we are very positive about the management of GPW DAI with a lot of experience in the media, which suggests that with the mix of demanding conditions, they will perform really well. GPW Logistics and GPW DAI are both open to work with key market players and teams in capital terms. We want those businesses to be standalone operators as much as possible as members of our group of companies, our product portfolio and revenue streams.... but we don't want them to consume too much of our management time, and it's going in that direction. Did you ask about the private market as well?
I think I answered your question, right? Three questions about financials. The prospective growth of FTEs in the group and CapEx in the coming quarters. As concerns the number of FTEs, the growth of the number of FTEs, we are, in general, not planning a significant growth in FTEs in our current operations. Quite the opposite, we will try to optimize FTEs in the strategic initiative to improve the effectiveness of our group as part of our strategy, published last April. But we have to complete the projects that are now well-developed. And in the interim, the optimization projects require some change in the qualifications or competencies of our staff, as the CEO said, as we presented in our strategy. We don't want to mix operations and projects.
So we're expecting that next year, we may have a dozen or so new FTEs in the group temporarily to go through that transition and implement our strategic initiatives, while making a shift in the competencies of our staff, given the technology leap in the GPW Group. Mainly with the implementation of the new trading system, the change of the data center, the new approach to the provision of IT services, and changes in other areas. So temporarily, next year, as I said, we expect an increase. In 2025 and beyond, however, we will make efforts to decrease, reduce FTEs. And the long-term prospect under our strategy is to reduce the headcount of the group by at least 10% within the time horizon of the five years, and unless, unless we acquire any new business. The other question was about CapEx.
Yes, CapEx and the outlook for CapEx. Well, I said before, when I discussed CapEx in Q3 2023, that in Q4, we expect CapEx to grow significantly to around PLN 25 million, which is close to what we reported in Q4 2022. But when it comes to 2024, we are planning additional increase as we are completing the projects which are now well advanced. So I believe CapEx will be at the level I just mentioned. Thank you. Next question about HR costs. How high was the inflation benefit? Mr. Młotkowski said that before. What was the average salary raise this year, in addition to the inflation-linked benefit? The average salary raise was around 7% in Q3, so we expect HR costs or salary costs to go up by about 7% as a result of that salary raise.
7 + 5, that's simple mathematics. It's still less than average CPI over that period. Final question about financials. What is the level of cost attributable to the AMX? AMX, well, the company generated PLN 6 million in Q3. PLN 5 million was the level of operating expenses, so the net profit was PLN 1.1 million. Quite a decent profit when you think about the launch of our mutual cooperation. Two questions about the commodity market. How much bigger would TGE's revenue be if electricity or the obligation to trade in electricity on the exchange was reestablished? Thank you for that question. It's not easy to say. We don't know what level of that obligation would be, who would be exempted, when such obligation would be imposed.
Press reports suggest that such an obligation would be introduced, but we don't know how large and subject to what exemptions. The obligation was nominally 100%, but in reality it was 35%-55%, as some producers, including renewable energy source producers, were exempted. So there are so many different variables relating to that potential obligation, that it is very difficult to measure the financials. So I wouldn't like to mislead you. We are all professionals. We don't want to discuss numbers without full understanding of variables. However, we hope and expect that, given the position taken by officials so far, that obligation will definitely improve the turnover and liquidity on the forward market. So we could expect several or dozen terawatt-hours of additional electricity traded.
But when we know more about the potential law, we could say more. Another question about the commodity market: the outlook for the green certificate market next year. Yep. Mm, I said that when I discussed slide three or all three slides. The drop in revenue from green certificates was quarter-on-quarter, was due to the fact that Q3 and Q4 are always weaker, and there's less concentration compared to Q2, when certificates are redeemed. But so sorry, year-on-year, that drop was driven by two or three factors. One, electricity consumption is much lower. Traders that supply electricity to end users based on percentage thresholds in the regulation of the Ministry of Climate, have to redeem a certain number of certificates. So the less energy is consumed, the fewer certificates are traded, issued, and canceled.
Another factor regarding green certificates, the system phasing out green certificates over a time horizon of 15 years. So there will be fewer redemptions, cancellations, and less turnover. The third factor, which impacts the volumes and the revenue of the TGE group most strongly, the level of redemptions or cancellations of green certificates, which has dropped from 18% to 18.5% to 12% this year. Next year, the new regulation suggests that the reduction will be even deeper, from 12.5% to 5%. Unfortunately, this regulatory uncertainty. Well, we used to know three years in advance about the level of redemptions, which was good for the exchange and for market participants who could plan their cancellations in advance. Unfortunately, now we are informed about the redemptions requirement a year ahead, which creates more uncertainty. One more question to Mr.
Dietl, before we turn over to Ms. Olszewska. The military conflict in Nagorno-Karabakh and the war between Israel and Palestine, will it have a direct impact on the AMX business? What is the relationship between the war in the promised land and AMX? I cannot see a direct connection. Maybe the person asking knows. I don't see a connection. Regarding Artsakh, the enclave in Nagorno-Karabakh, we look at it from the human dimension. Armenia has a population of 3 million. Armenians started to flee Russia after the full-scale invasion of Russia against Ukraine. About 150,000 people arrived, growing the population by 5%, and then 140,000 arrived from Nagorno-Karabakh. So real estate prices in Armenia grew twofold. People live in overcrowded homes, 30 people living in a single apartment.
So the human dimension is difficult, and the symbolic dimension. Imagine that Poland were to lose the cities of Gniezno and Poznań, the historical, traditional sites of rulers of Poland. So it's really, it's really, that, that's, that symbolic situation is difficult. Back to business. For us, the territorial integrity of Armenia as a state is key. The reports from global media and Armenian media, we follow them very closely. We have contacts on the ground. We can see close discussions between Armenia and the U.S. concerning military cooperation, which basically mitigates the risk of, of, the risk to the territorial integrity of Armenia. We are taking steps, however, to also protect the local infrastructure and business continuity of the Armenia Securities Exchange, but we think that it is very unlikely that the integrity, territorial integrity of Armenia should be breached.
Azerbaijan is now requesting a corridor, which is not to the liking of another local power, Iran. So given this very specific constellation of the U.S. as the global power, Iran, a regional power, they are both standing by Armenia, so this mitigates the risk. But in general, volatility on the markets, unfortunately... Well, it does drive turnover. Hopefully, volatility should not result from geopolitical tensions. So we are quite comfortable about the business continuity of AMX. On the other hand, if I may quote a pop song, "We are expecting the worst, hoping for the best." So we are anticipating adverse scenarios, but their probability is not high. We are expecting some stabilization and dynamic economic growth in Armenia. Thank you. Finally, two questions to Ms. Olszewska. One, about the first year of GlobalConnect and its outlook for next year.
Yes, it's been almost a year since GlobalConnect launched. Given its conditions, we now have one introducing market maker on GlobalConnect, Santander Bank. Of course, we'd like to have more introducing market makers, but for the time being, we have one. It's mostly up to them how fast new stocks and which stocks will be introduced to GlobalConnect. They perform other key functions to introduce and make the market for those stocks. What we can see is that there is some turnover on the market, day after day. It may not be satisfactory, we have appetites for more, but still, there is turnover, and I think it's important to introduce new stocks. What we look forward to, and expect to happen soon, is the launch of the first U.S. stocks. I think this will be a breakthrough on NewConnect.
This is something we are working on. This was already pre-announced by the Warsaw Stock Exchange and Santander. This will be a new chapter for GlobalConnect. We look forward to it. We hope it's gonna happen sooner rather than late. The last question: the October volumes on the financial market were very promising. What is the expectation for Q4, and what is the IPO pipeline? Right. We are halfway through the final quarter of the year. When it comes to EOB turnover, as I said, it's very strong, crossing the mark of PLN 1 billion daily. So if I may, highlight several factors, the uptrend on the stock exchange has continued for 12, even 13 months. Indices, WIG, WIG20, the other indices, have gained quite well.
If you look at the ratios and valuations, Polish stocks are relatively cheap, which should attract more attention from investors due to this significant discount. If you look at the indices, the MSCI Poland, MSCI Emerging Markets. All this means that the market looks very promising in Q4. The other question about IPOs is really hard to address, because I am not allowed to disclose any names of potential IPOs until this is made public. So I cannot really make any announcements. The names, however, that have already been quoted in the media as potential IPO targets, the most important one probably is Murapol, but the decision is in the hands of the owners. Also, the decision about the timing. However, clearly, the company is considering to be floated.
The IPO market is rather quiet across Europe, but we saw some signs of improvement. Q3 across Europe was better than Q1 and Q2, so we hope this will also help our market. It's very important to have some good stories from companies that could attract investors and grow our turnover.
Thank you very much. If you have any follow-up questions, please contact our investor relations.