Deutsche Boerse Reports Higher 1Q Profit, Announces Share Buyback

By Ulrike Dauer Features Dow Jones Newswires

Deutsche Boerse AG (DB1.XE) Wednesday reported a 41% rise in net profit for the first quarter, helped by a one-time gain from a stake sale, and announced plans to buy back shares.

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The German exchange operator also confirmed standalone profit targets for this year and next after its planned game-changing merger with London Stock Exchange (LSE.LN) was blocked by the European Union on antitrust concerns at the end of March.

The first three months of the year were characterized by low volatility in financial markets and thus lower hedging needs by market participants. This was reflected in reduced trading volumes on the Eurex derivatives exchange and the Xetra cash market, but in part offset by higher revenue at the Clearstream clearing and settlement business.

Net profit rose to EUR280.1 ($304.1) million from EUR198.6 million, while net revenue was up 2.1% to EUR623.4 million from EUR610.5 million. Year-earlier figures had been revised to account for the sale of U.S. International Securities Exchange Holdings Inc. to Nasdaq in 2016.

Profit and revenue beat analyst expectations of a small revenue decline.

Net profit was flattered by a one-time boost of EUR69 million after-tax from selling the remaining stake in U.S. exchange operator Bats Global Markets, a legacy of ISE's holdings.

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On the other hand, Deutsche Boerse had some EUR29.2 million in one-time costs mainly related to the failed LSE merger.

Deutsche Boerse plans to repurchase shares worth EUR200 million in the second half of 2017, thereby using a portion of the $1.1 billion proceeds from the ISE sale.

Analysts now expect it to come up with an updated standalone strategy including efforts such as enhancing its Asia presence, pursuing bolt-on acquisitions and working on its revenue-boosting, cost-cutting program.

Deutsche Boerse will comment further in an analyst call at 1200 GMT Thursday.

Write to Ulrike Dauer at ulrike.dauer@wsj.com

(END) Dow Jones Newswires

April 26, 2017 15:47 ET (19:47 GMT)