Johannesburg, 25 February 2021: JSE Limited (JSE) today announced its results for the full year ended 31 December 2020. Earnings before interest and tax, depreciation and amortisation (EBITDA) increased by 19% whilst net profit after tax (NPAT) grew by 12% to R778 million (2019: R695 million). The JSE’s strong balance sheet and sustained quality of earnings and cash generation underpinned its financial resilience during the pandemic.
JSE Group CEO Leila Fourie, said: “Resilience during a crisis is neither accidental nor coincidental. The JSE’s operational dependability demonstrated throughout the COVID-19 pandemic is a direct result of its multi-year investment in technology infrastructure, key skills and a focus on building lasting relationships of trust with clients and stakeholders. That is why I am pleased to share a strong set of results for 2020. As much as these results reflect the near-term impact of market volatility, they also echo the enduring value created by the exchange.”
Total revenue increased by 13% to R2.5 billion (2019: R2.2 billion), with both operating income and total revenue at record highs.
The JSE remained in a healthy position with regard to cash and capital, with net cash generation in 2020 supporting a stable cash balance of R2.5 billion at the end of December (2019: R2.6 billion). Accordingly, the Board has declared an ordinary dividend of 725 cents per ordinary share, an increase of 5% over the 2019 ordinary dividend of 690 cents per share. This corresponds to an ordinary dividend pay-out of distributable profits of 83% in 2020 (2019: 87%).
“The JSE recognises the substantial human impact of the COVID-19 pandemic as well as its impact on the financial ecosystem. The health and safety of employees, support for clients and the operational resilience of platforms and infrastructure remain key focal points for the Group,” continues Fourie.
The performance of the JSE's various markets and segments was as follows:
Capital Markets (45% of Group revenue)
Primary markets: Revenue increased by 3% to R152 million (2019: R147 million). Initial public offerings (IPOs) remained under pressure in 2020, with fewer deals for the year (four in 2020 versus five in 2019) owing to uncertain market conditions. However, the JSE saw a growing demand for green bonds in emerging markets, driven by private borrowers looking for investments in sustainable energy, cleaner water, transport and smart buildings. There were 20 de-listings (2019: 24), which were largely the result of corporate actions and schemes of arrangement in mostly small-to-mid-sized, illiquid counters. Although the number of listed entities declined, the aggregate market capitalisation of all entities listed on the JSE increased by 2% during 2020.
Equity Market: Revenue increased by 14% to R493 million (2019: R433 million) owing to a 7% increase in billable value traded and more central order book activity. The JSE’s headline All Share Index (ALSI) a low of -33.5% on 19 March 2020 and ended the year up 4.07%. Colocation activity contributed 50% (2019: 42%) of overall value traded with 40 racks (2019: 32). Foreigners remained net sellers of equities in 2020.
Equity Derivatives Market: Revenue increased by 1% to R145 million (2019: R143 million) owing to increased activity and a more diverse product mix. Overall, the Equity Derivatives Market came under pressure in the face of greater market volatility in 2020. Value traded was down 7% owing to weaker activity in the JSE Top 40 Index, which commands the largest percentage of contracts traded, as well as Single-Stock Futures (SSFs) with dividend risk.
Currency Derivatives Market: Revenue declined by 3% to R46 million (2019: R47 million) owing to an 8% decline in contracts traded. The currency market has largely been defined by the global events of 2020.
Bond and Interest Rate Market: Revenue increased by 4% to R71 million (2019: R68 million), largely owing to a product mix change, despite nominal bond value declining by 7%. Volatility impacted the bond market, resulting in a significant increase in standard trades, driven by COVID-19 challenges, South Africa’s exit from the World Government Bond Index and therefore large foreign outflows.
Commodity Derivatives Market: Revenue increased by 7% to R87 million (2019: R82 million), largely owing to the product and pricing mix. Value traded grew, driven by the agricultural market which accounted for approximately 98% of volume traded in 2020.
Company Services: Revenue decreased by 46% to R6 million (2019: R12 million), largely owing to the closure of JSE-hosted events and in-person training owing to COVID-19. Revenue was largely driven by the JSE’s new virtual AGM service and virtual training in 2020.
Post-Trade Services (39% of 2020 Group revenue): Clearing and settlement revenue increased by 16% to R446 million (2019: R385 million), driven by increased billable value traded and central order book activity in the Equity Market. Back-office Services (BDA) revenue increased by 13% to R376 million (2019: R333 million) as a result of a 21% increase in the number of transactions and smaller transaction sizes.
Information Services (16% of 2020 Group revenue): Revenue increased by 15% to R356 million (2019: R310 million), largely driven by new business, annual price increases and FX gains on US Dollar denominated revenue.
“The JSE’s focus is underpinned by a resilient and responsive core business alongside a promising inorganic growth strategy. With this in mind, we will execute our strategy with speed and discipline and continue to rapidly improve our service offerings and technology to serve our clients with consistent excellence. As such, the JSE remains committed to providing a trusted market infrastructure”, concludes Fourie.
ABOUT THE JSE
The Johannesburg Stock Exchange (JSE) has a well-established history operating as a market place for trading financial products. It is a pioneering, globally connected exchange group that enables inclusive economic growth through trusted, world class, socially responsible products, and services for the investor of the future. It offers secure and efficient primary and secondary capital markets across a diverse range of securities, spanning equities, derivatives, and debt markets. It prides itself as being the market of choice for local and international investors looking to gain exposure to leading capital markets on the African continent. The JSE is currently ranked in the Top 20 largest stock exchanges in the world by market capitalisation, and is the largest stock exchange in Africa, having been in operation for 130 years.
As a leading global exchange, the JSE co-creates, unlocks value & makes real connections happen.
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