1Q24
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Dial-In: +1 360 209 5623
Webinar ID: 883 3827 0177
Password: 244487
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B3 ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2024
São Paulo, May 09, 2024 - B3 S.A. - Brasil, Bolsa, Balcão ("B3" or "Company"; B3SA3) reports today its earnings for the 1st quarter of 2024 (1Q24). Gross revenues reached R$2,466.3 million, in line with 1Q23 and 1.1% down by against 4Q23. Recurring EBITDA totaled R$1,573.5 million, down by 3.0% against 1Q23 and up by 7.8% against 4Q23, while recurring net income1 was R$1,130,2 million, down by 7.1% against 1Q23 and up by 6.9% against 4Q23.
MESSAGE FROM B3's MANAGEMENT
For another quarter, uncertainties in the international economic scenario caused significant oscillations in the behavior of future interest rates in some of the main global economies. In Brazil, the Central Bank kept on its cycle of interest rate cuts and announced two reductions of 0.5 p.p., taking the interest rate to 10.75% p.a. at the end of the quarter.
This scenario continued to have a negative impact on the recovery of volumes in the Cash Equities and Equity Instruments segment, with the average daily traded volume (ADTV) in cash equities totaling R$23.6 billion in 1Q24, down by 2.8% and 6.4% compared to 4Q23 and 1Q23, respectively.
In Listed Derivatives, the average daily volume (ADV) totaled 6.7 million contracts, up by 8.6% and 10.7% compared to 4Q23 and 1Q23, respectively, mainly due to the positive performance of Interest Rate contracts in BRL. In the OTC segment, the scenario of higher interest rates continued to favor volumes, with growth of 14.3% in the outstanding balance of fixed income instruments and 26.2% in the outstanding balance of Treasury Direct.
In other segments, compared to 1Q23, the highlights include a 33.7% increase in revenue from the Infrastructure for Financing, which totaled R$148.0 million, impacted by the Desenrola program, and a 10.5% increase in the revenue from Technology, Data and Services, which amounted to R$509.9 million, reflecting the consolidation of Neurotech and the growth in the number of clients accessing the OTC platforms and the annual adjustment for inflation of technology services.
Even in an adverse scenario for the cash equities market, the efficiency of B3's revenue diversification was once again proven, with gross revenue totaling R$2.5 billion, remaining virtually stable compared to both 1Q23 and 4Q23. Total expenses increased by 3.8% compared to the 1Q23, in line with the inflation for the period, excluding Neurotech expenses and those related to the Desenrola2 program. Compared to 4Q23, total expenses were 13.6% lower, due to non-recurring effects in the fourth quarter. It is worth noting that this quarter had a negative impact of R$67.6 million due to the write- off in the value of some intangible assets. Recurring net income reached R$1.1 billion, down by 7.1% against 1Q23 and up by 6.9% compared to 4Q23.
In relation to the most recent strategic developments, in line with its pillar of product development in its core businesses, B3 launched the Bitcoin futures contract in April. The derivative seeks to serve not only investors who want to hedge against fluctuations in cryptocurrency prices, but also clients who are looking for diversification and greater exposure to this type of asset in a regulated environment. Additionally, B3 launched in March the VXBR, also known as the "Brazilian VIX", in partnership with S&P Dow Jones. This index introduces a new methodology for tracking the implied volatility of the local market. The launch makes it possible to create products linked to this index and is aligned with the commitment to develop the Brazilian market.
Finally, B3 announced, also in April, changes to the fee policies for the cash equity market, aimed at simplifying and enhancing the current price table for different customer profiles, as well as ensuring greater efficiency in the markets in which it operates. The changes are the result of studies started in 2019 and widely publicized in 2020, which depended on market readiness and adaptations to be implemented. B3's expectation is that there will be no material impact on the company's revenues, based on backtests performed with data from 2023.
(In R$ millions) | 1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | |||||||||
(%) | (%) | |||||||||||||
Total revenues | 2,466.3 | 2,460.5 | 0.2% | 2,493.6 | -1.1% | |||||||||
Net revenues | 2,221.3 | 2,209.4 | 0.5% | 2,242.2 | -0.9% | |||||||||
Expenses | (927.1) | (851.8) | 8.8% | (1,072.8) | -13.6% | |||||||||
Financial Result | 45.4 | 142.1 | -68.1% | 24.5 | 84.9% | |||||||||
Net income for the period | 949.6 | 1,089.4 | -12.8% | 915.5 | 3.7% | |||||||||
Adjusted expenses3 | (503.9) | (468.6) | 7.5% | (633.1) | -20.4% |
Recurring EBITDA | 1,573.5 | 1,622.1 | -3.0% | 1,459.6 | 7.8% |
Recurring EBITDA margin | 71.3% | 73.4% | -214 bps | 65.1% | 618 bps |
Recurring net income | 1,130.2 | 1,216.3 | -7.1% | 1,057.7 | 6.9% |
- See reconciliation on page 7.
- Neurotech's financial statement was consolidated with B3's in May/23 and expenses with the Desenrola Program began to be recognized in 4Q23, so they had no impact on 1Q23 expenses.
- Expenses adjusted for: (i) depreciation and amortization; (ii) long-termshare-based incentive program - principal and charges; (iii) provisions; (iv) revenue-linked expenses; (v) M&A expenses; and (vi)
other extraordinary expenses.
PUBLIC INFORMATION
OPERATIONAL PERFORMANCE
All comparisons in this document are in relation to the first quarter of 2023 (1Q23), unless otherwise indicated.
Listed
Cash Equities and Equity Instruments
1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||||||
(%) | (%) | |||||||||||||||
Cash equities market | ADTV (R$ millions) | 23,582 | 25,204 | -6.4% | 24,259 | -2.8% | ||||||||||
Margin (bps) | 3.383 | 3.273 | 0.110 bps | 3.298 | 0.084 bps | |||||||||||
Average market capitalization | (R$ billions) | 4,631 | 4,076 | 13.6% | 4,434 | 4.4% | ||||||||||
Turnover velocity | Annualized (%) | 127.8% | 153.3% | -2,552 bps | 135.7% | -787 bps | ||||||||||
Options market (stock/indices) | ADTV (R$ millions) | 711 | 662 | 7.4% | 723 | -1.7% | ||||||||||
Margin (bps) | 12.171 | 11.719 | 0.452 bps | 12.019 | 0.152 bps | |||||||||||
Forward market | ADTV (R$ millions) | 306 | 280 | 9.2% | 303 | 1.0% | ||||||||||
Margin (bps) | 5.482 | 4.852 | 0.630 bps | 5.348 | 0.133 bps | |||||||||||
Stock indices future | ADV (thousands of contracts) | 3,177 | 3,263 | -2.7% | 3,393 | -6.4% | ||||||||||
Average RPC (R$) | 0.957 | 0.976 | -1.9% | 0.936 | 2.2% | |||||||||||
Number of individual investors | Average (thousands) | 5,064 | 5,247 | -3.5% | 4,920 | 2.9% | ||||||||||
Number of accounts in depository | Average (thousands) | 5,901 | 6,142 | -3.9% | 5,743 | 2.8% | ||||||||||
(total) | ||||||||||||||||
Securities lending | Average open interest (R$ billions) | 136 | 125 | 9.3% | 132 | 3.4% | ||||||||||
Average Lender Rate (% p.a.) | 0.842% | 1.467% | -62 bps | 1.169% | -33 bps | |||||||||||
Note: ADTV stands for Average Daily Traded Volume; ADV stands for Average Daily Volume; RPC stands for Revenue per Contract); and bps stands for basis point.
In the Cash Equities and Equity Instruments market, there was a 6.4% decrease in the ADTV of cash equities, explained mainly by the continuing monetary tightening scenario in the main global economies and the still high interest rate in Brazil. Despite the decrease, it is worth highlighting the growth in volumes of ETFs, BDRs and listed funds, which accounted for 12% of the ADTV in 1Q24 (vs. 10% in 1Q23). In the case of stock indices futures, the 2.7% reduction in the average number of contracts traded is explained by the decrease in trading in the mini and standard versions of the contracts, mainly Ibovespa futures.
The trading/post-trading margin on the cash equities market was 3.383 bps, an increase of 0.110 bps compared to 1Q23 and 0.084 bps compared to 4Q23, mainly explained by (i) a decrease in day trade participation; and (ii) lower volumes traded through market maker and liquidity provider programs, which have lower fees. On the other hand, the average revenue per contract (RPC) of stock indices futures fell by 1.9%, mainly explained by adjustments to the program aimed at High Frequency Traders (HFTs)4 announced in Sep/23.
Note: Margin in bps includes fees at both ends of the operation (buy + sell). 3.53 bps was the average margin for the last month of the period (Mar/24).
The average number of accounts in the equities' depository grew by 2.8% compared to 4Q23, while in comparison with 1Q23 there was a reduction of 3.9%. This decrease is explained by the migration of level for a BDR in Aug/23, which resulted in the redemption of the amount invested and the subsequent closure of accounts containing only this security.
4 For more information, accessCircular Letter dated 09/12/2023.
PUBLIC INFORMATION | 2 |
Interest Rates, FX and Commodities
1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||||||
(%) | (%) | |||||||||||||||
Interest rates in BRL | ADV (thousands of contracts) | 5,523 | 4,780 | 15.5% | 4,872 | 13.4% | ||||||||||
Average RPC (R$) | 0.691 | 0.845 | -18.2% | 0.815 | -15.3% | |||||||||||
Interest rates in USD | ADV (thousands of contracts) | 304 | 276 | 10.3% | 314 | -3.1% | ||||||||||
Average RPC (R$) | 2.054 | 2.276 | -9.7% | 2.037 | 0.9% | |||||||||||
FX rates | ADV (thousands of contracts) | 849 | 977 | -13.1% | 960 | -11.6% | ||||||||||
Average RPC (R$) | 4.790 | 5.101 | -6.1% | 4.725 | 1.4% | |||||||||||
Commodities | ADV (thousands of contracts) | 25 | 19 | 35.8% | 24 | 6.6% | ||||||||||
Average RPC (R$) | 1.678 | 1.859 | -9.7% | 1.713 | -2.0% | |||||||||||
Total | Total ADV (thousands of contracts) | 6,702 | 6,052 | 10.7% | 6,170 | 8.6% | ||||||||||
Average RPC (R$) | 1.275 | 1.602 | -20.4% | 1.491 | -14.5% | |||||||||||
The ADV totaled 6.7 million contracts, an increase of 10.7%, reflecting the 15.5% growth in the ADV for Interest Rates in BRL, mainly influenced by Options on DI Spot Rate (+74.5%). The average RPC was down by 20.4% in the period, influenced by the decrease in the RPC of all contracts, mainly by the 18.2% reduction in the RPC for Interest Rates in BRL, which in turn is explained by the greater concentration of shorter contracts, which have lower fees. Additionally, revenues from Interest in USD and FX contracts were impacted by the devaluation of the USD against BRL.
It is important to highlight that, in Oct/23, changes were made to the fees5 for Options on DI Spot Rate and to the price table for USD contracts, which also impacted the RPCs for Interest Rates in BRL and FX, respectively. The objective of these changes in fees was, in the case of the DI Spot Rate Option, to improve the efficiency of volume discounts for the market and, in USD derivatives, to adjust the fees according to the size of the contract.
OTC
Fixed Income Instruments
1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||||||
(%) | (%) | |||||||||||||||
Issuances | Bank funding (total in R$ billions) | 3,767 | 3,869 | -2.6% | 4,205 | -10.4% | ||||||||||
Other (total in billions) | 346 | 305 | 13.2% | 497 | -30.4% | |||||||||||
Outstanding | Bank funding (average in R$ billion) | 3,063 | 2,682 | 14.2% | 3,019 | 1.5% | ||||||||||
Corporate debt (average in R$ billions) | 987 | 1,016 | -2.8% | 1,019 | -3.1% | |||||||||||
balance | ||||||||||||||||
Other (average in R$ billions) | 2,185 | 1,660 | 31.6% | 2,053 | 6.5% | |||||||||||
Treasury Direct | Number of investors (average in thousands) | 2,539 | 2,120 | 19.8% | 2,450 | 3.6% | ||||||||||
Outstanding Balance (average in R$ billions) | 129 | 102 | 26.2% | 124 | 4.1% | |||||||||||
Note: "Bank funding" includes DI, CDB, Financial Bills and other instruments such as RDB, LC, DPGE.
"Other" includes real estate notes (LCI, CCI, CRI and LH), agribusiness certificates (CRA, LCA, CDCA, CLCA and CTRA) and funding instruments (CCB, CCCB, NCE, CCE, Export Notes, NC).
The volume of new issuances of bank funding instruments decreased 2.6%, mainly due to the decrease in CDB issuances, which accounted for 70.6% of fixed income instrument issuances in the period. In addition, the average outstanding balance of bank funding instruments grew by 14.2%, while the volume of corporate debt fell by 2.8%, mainly due to the reduction in the volume of leasing debentures, which matured at the end of 2023.
Another highlight of the fixed income market was the continuous growth in Treasury Direct (TD), in which the number of investors and the outstanding balance were up by 19.8% and 26.2%, respectively. B3 offers an incentive program for brokerage firms to increase the number of investors in this product, which is revised annually.
OTC Derivatives and Structured Notes
1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | |||||||||||
(%) | (%) | ||||||||||||||
Issuances | (total in R$ billion) | 3,349 | 3,162 | 5.9% | 3,779 | -11.4% | |||||||||
Outstanding | (average in R$ billion) | 6,121 | 5,619 | 8.9% | 6,168 | -0.8% | |||||||||
balance | |||||||||||||||
Issuances in the OTC derivatives and structured notes market increased by 5.9%, mainly influenced by the 12.2% increase in swap issuances. In the same comparison, the average outstanding balance went up by 8.9%.
5 For more information, accessCircular Letter dated 09/12/2023.
PUBLIC INFORMATION | 3 |
Infrastructure for Financing
1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | |||||||||||
(%) | (%) | ||||||||||||||
Number of vehicles sold (thousands) | 4,522 | 4,236 | 6.7% | 4,952 | -8.7% | ||||||||||
SNG | Number of vehicles financed (thousands) | 1,659 | 1,366 | 21.4% | 1,543 | 0.9% | |||||||||
% of Vehicles financed / vehicles sold | 36.7% | 32.3% | 4.4 p.p. | 33.2% | 3.5 p.p. |
The number of vehicles sold in Brazil in 1Q24 increased by 6.7%, while the number of loans grew by 21.4%, with emphasis on the 25.0% increase in the number of new cars financed and the 30.4% increase in the number of new motorcycles financed. The percentage of vehicles financed reached 36.7% of vehicles sold, an increase of 4.4 p.p. compared to 1Q23.
Technology, Data and Services
1Q24 | 1Q23 | 4Q23/4Q22 | 4Q23 | 1Q24/4Q23 | |||||||||
(%) | (%) | ||||||||||||
OTC utilization | 21,179 | 19,676 | 7.6% | 20,761 | 2.0% | ||||||||
Market data | Average number of customers | 161 | 159 | 1.5% | 165 | -2.2% | |||||||
Co-location | 93 | 93 | 0.0% | 94 | -1.1% |
The average number of customers for the monthly use of OTC systems increased by 7.6%, mainly as a result of the growth in funds industry in Brazil.
INCOME STATEMENT
Revenues
Total revenues: R$2,466.3 million, in line with 1Q23, as a result of the resilience of the Company's business structure, showing that the 9.1% decrease in the Listed segment was offset by the good performance of the other segments. Excluding the effects of Neurotech acquisition, total revenues would have been R$2,436.5 million, down by 1.0% on 1Q23.
Listed: R$1,398.7 million (56.7% of the total), down by 9.1%.
- Cash Equities and Equity Instruments: R$856.7 million (34.7% of the total), down by 7.1%.
- Trading and post-trading: R$733.6 million (29.7% of the total), down by 5.5%, reflecting lower volumes in the period, influenced by the factors explained above.
- Depository: R$42.2 million (1.7% of the total), up by 24.1% in the period, explained by the 19.0% growth in the average balance at the depository (excluding exempt investors), as well as the adjustment for inflation (IPCA) of the Central Depository fees6, which came into effect at the beginning of the year.
- Securities lending: R$47.7 million (1.9% of the total), down by 41.9%, due to the 62 bps decrease in the average rate of contracts traded between participants in this product.
- Listing and solutions for issuers: R$33.2 million (1.3% of the total), up by 12.5%, mainly due to (i) a greater number of offerings, mainly related to real estate fund issuances, held in 1Q24; and (ii) the adjustment for inflation of the Fee Policy for Issuers and Public Offerings7, applied at the beginning of 2024.
- Interest Rate, FX and commodities: R$542.0 million (22.7% of the total), down by 12.1%, mainly reflecting the (i) lower volumes and lower RPC in FX derivative contracts, impacted by the devaluation of the USD against the BRL; (ii) lower revenues from Interest Rate contracts in BRL, where the growth in volumes did not offset the decrease in RPC; and (iii) two fewer working days when compared to 1Q23. It is worth noting that this line is impacted by the cash flow hedge accounting set up in the bond issuance in Sep/21, where the bond is the hedging instrument and the highly probable future revenues in dollars (mainly related to the listed FX derivative contracts in USD and Interest Rate contracts in USD) are the hedging objects. As a result, the effects of exchange rate fluctuations on that bond are stated in Shareholders' Equity and recognized in the income statement to the extent that revenues are realized. In 1Q24, the net impact of this structure was positive at R$14.1 million, given the exchange rate variation in the period.
OTC: R$395.8 million (16.0% of the total), up by 13.2%.
- Fixed-incomeinstruments: R$259.2 million (10.5% of the total), up by 16.2%, mainly due to (i) a 14.2% increase in the average outstanding balance of bank funding instruments; (ii) an increase in revenues from Treasury Direct, which in 1Q24 totaled R$59.7 million compared to revenues of R$47.6 million in 1Q23. It should be noted that the market incentives linked to this product amounted to R$21.1 million in 1Q24 (vs. R$16.3 million in 1Q23) and are classified as a revenue-linked expense.
- Derivatives and structured transactions: R$75.2 million (3.0% of the total), in line with 1Q23, mainly explained by the increase in revenues from structured and swap operations.
- For more information, access Circular Letter of 12/28/2023.
- For more information, accessCircular Letter of 11/23/2023.
PUBLIC INFORMATION | 4 |
- Other:R$61.4 million (2.5% of the total), up by 19.9%, reflecting the 18.6% increase in the average outstanding balance of fund units.
Infrastructure for Financing: R$148.0 million (6.0% of the total), an increase of 33.7%, mainly due to revenues from the platform developed by B3 for the Desenrola program, in addition to the 21.4% growth in the number of vehicles financed.
Technology, Data and Services: R$509.8 million (20.7% of the total), an increase of 10.5%.
- Technology and access:R$305.9 million (12.4% of the total) up by 9.6%, reflecting both the increase in the number of customers in the OTC segment and the annual price adjustments for inflation in the monthly usage line and in technology products.
- Data and analytics:R$159.3 million (6.5% of the total), an increase of 26.2%, mainly reflecting the consolidation of Neurotech in May 2023. Excluding Neurotech, there would be an increase of 2.3%, mainly influenced by the growth of 5.6% in Neoway's revenues and data products, more than offsetting the lower revenue from market data.
- B3 Bank:R$21.2 million (0.9% of the total), down by 34.2%, mainly explained by lower revenues from floating and BDRs.
- Other: R$23.4 million, (0.9% of the total), down by 1.4%, mainly explained by lower revenues from gold custody and the application of fines.
Reversal of provisions: R$14.0 million, relating to the reversal of the Company's provision for profit sharing established in previous years.
Net revenues: R$2,221.3 million, up by 0.5% against 1Q23 and down by 0.9% against 4Q23.
Expenses
Expenses totaled R$927.1 million, an increase of 8.8%. Excluding Neurotech expenses and the Desenrola program, expenses would have amounted to R$884.3 million, a 3.8% increase compared to 1Q23.
- Personnel and charges: R$356.8 million, an increase of 11.4%, mainly related to the annual salary adjustment (bargaining agreement), the adjustment of medical assistance plans and the inclusion of Neurotech, which was partially offset by the effects of restructuring at Neoway. Excluding the effects of the consolidation of Neurotech, the growth would have been 5.3%.
- Data processing: R$145.9 million, an increase of 14.1% compared to 1Q23, mainly due to the expenses incurred with the operation of the Desenrola program platform, as well as the inclusion of Neurotech. Excluding the impacts of Neurotech and Desenrola, the growth would have been 2.4%.
- Depreciation and amortization: R$279.9 million, an increase of 7.8%, explained mainly by the consolidation of Neurotech, with the inclusion of the amortization of intangibles recognized in the transaction.
- Revenue-linkedexpenses: R$68.6 million, an increase of 8.4%, mainly explained by the higher amount of the Treasury Direct incentive.
- Third-partyservices: R$20.8 million, a decrease of 38.1% explained by non-recurring consultancy expenses in 1Q23.
- Other: R$35.1 million, a 23.5% increase, mainly due to extraordinary expenses at Associação Profissionalizante BM&F, a company in which B3 acts as the maintainer8.
The following tables show the breakdown and evolution of adjusted expenses.
Reconciliation of adjusted expenses
(in R$ millions) | 1Q24 | 1Q23 | 1Q24/1Q2 | 4Q23 | 1Q24/4Q23 | ||||||||
3 (%) | (%) | ||||||||||||
Expenses | (927.1) | (851.8) | 8.8% | (1,072.8) | -13.6% | ||||||||
(+) Depreciation and amortization | 279.9 | 259.6 | 7.8% | 279.9 | 0.0% | ||||||||
(+) Long-termstock-based incentive program | 51.8 | 44.6 | 16.1% | 39.8 | 30.0% | ||||||||
(+) Provisions (recurring and non-recurring) | 9.6 | 10.8 | -10.5% | 40.4 | -76.1% | ||||||||
(+) Revenue-linked expenses | 68.6 | 63.3 | 8.4% | 69.3 | -1.0% | ||||||||
(+) M&A expenses | - | 5.0 | - | 10.3 | - | ||||||||
(+) Other extraordinary expenses | 13.2 | - | - | - | - | ||||||||
Adjusted expenses | (503.9) | (468.6) | 7.5% | (633.1) | -20.4% |
8 For more information, see note 10 to the individual and consolidated financial statements.
PUBLIC INFORMATION | 5 |
EBITDA
Recurring EBITDA totaled R$1,574.2 million, a decrease of 2.7%. The recurring EBITDA margin was 71.3%, a decrease of 214 bps. In relation to 4Q23, there was an increase of 7.8% with an expansion of 618 bps in the margin.
(in R$ millions) | 1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||
(%) | (%) | ||||||||||||
EBITDA | 1,574.2 | 1,617.1 | -2.7% | 1,449.3 | 8.6% | ||||||||
(+) Other non-recurring expenses (income) | 13.2 | - | - | - | - | ||||||||
(+) M&A expenses | - | 5.0 | - | 10.3 | - | ||||||||
(-) Reversal of provisions | (13.9) | - | - | - | - | ||||||||
Recurring EBITDA | 1,573.5 | 1,622.1 | -3.0% | 1,459.6 | 7.8% | ||||||||
Recurring EBITDA margin | 71.3% | 73.4% | -214 bps | 65.1% | 618 bps |
Impairment of assets
As a result of the reduction in the projection of net cash flows during the remaining useful lives of internally developed platforms, B3, in accordance with CPC 01, identified an impairment loss in the amount of R$67.6 million.
Financial Result
The financial result was positive at R$45.4 million in 1Q24. Financial revenues amounted to R$444.4 million, a decrease of 10.0%, explained by the fact that, during 1Q23, financial revenues were positively impacted by the buyback of the 2031 Bond, which were also carried out in 1Q24, but in a smaller volume.
Financial expenses increased by 6.7%, mainly explained by a higher level of indebtedness of the Company, which ended the quarter with an indebtedness of R$14.1 billion (vs. R$11.7 billion in 1Q23), partially offset by a lower average CDI rate in 1Q24.
Financial result (in R$ millions) | 1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||
(%) | (%) | ||||||||||||
Financial result | 45.4 | 142.1 | -68.1% | 24.5 | 84,9% | ||||||||
Financial revenues | 444.4 | 493.6 | -10.0% | 398.7 | 11.4% | ||||||||
Financial expenses | (390.3) | (365.8) | 6.7% | (386.6) | 1.0% | ||||||||
Net exchange variations | (8.7) | 14.3 | - | 12.4 | - |
Additionally, it is important to note that the financial result was also impacted by the effects of the FX variation on the Company's foreign currency loans and investments abroad, and this impact was offset by the variation in the income tax and social contribution line (hedge structure). The table below isolates these effects, both from the financial result and from income tax and social contribution.
(in R$ millions) | 1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||
(%) | (%) | ||||||||||||
Financial result | 45.4 | 142.1 | -68.1% | 24.5 | 84.9% | ||||||||
(+/-) Effects of hedge on financial result | (15.7) | (21.9) | -28.3% | (15.7) | 0.1% | ||||||||
Adjusted financial result (excluding hedge effects) | 29.7 | 120.2 | -75.3% | 8.8 | 235.3% | ||||||||
Income before income tax | 1,269.0 | 1,499.1 | -15.3% | 1,195.7 | 6.1% | ||||||||
(+/-) Effects of hedge on financial result | (15.7) | (21.9) | -28.3% | (15.7) | 0.1% | ||||||||
Income before tax on adjusted profit | 1,253.3 | 1,477.2 | -15.2% | 1,180.0 | 6.2% | ||||||||
(excluding hedge effects) - (A) | |||||||||||||
Income tax and social contribution | (319.5) | (409.7) | -22.0% | (279.9) | 14.2% | ||||||||
(+/-) Effects of hedge on income tax and social contribution taxes | 15.7 | 21.9 | -28.3% | 15.7 | 0.1% | ||||||||
Adjusted income and social contribution taxes | (303.8) | (387.8) | -21.7% | (264.2) | 15.0% | ||||||||
(excluding hedge effects) - (B) | |||||||||||||
Effective Rate on Income Before Adjusted Income Tax and Social Contribution | 24.2% | 26.2% | -20.1 bps | 22.4% | 18.5 bps | ||||||||
(excluding hedge effects) - (B) / (A) | |||||||||||||
Income tax and social contribution
The income tax and social contribution line totaled R$319.5 million in 1Q24 and was mainly impacted by the distribution of interest on capital (IoC) in the amount of R$292.5 million. Current tax reached R$345.7 million. The deferred income tax and social contribution line was R$26.2 million, made up of tax credits set up to be used by the Company in the future. Furthermore, the income tax and social contribution line was also impacted by the hedging structure, as explained previously.
Net income
Net income attributed to B3 shareholders reached R$949.6 million, down by 12.8%. Excluding the non-recurring items highlighted below, net income would have reached R$1,130.2 million in the quarter, 7.1% below the same period of the previous year, reflecting the effects explained above.
PUBLIC INFORMATION | 6 |
Adjustments to net income
(in R$ millions) | 1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | ||||||||
(%) | (%) | ||||||||||||
Net income (attributable to shareholders) | 949.6 | 1,089.4 | -12.8% | 915.5 | 3.7% | ||||||||
(+) Other non-recurring revenues | (13.9) | - | - | - | - | ||||||||
(+) Other non-recurring expenses | 13.2 | - | - | - | - | ||||||||
(+) Impairment of assets | 67.6 | - | - | - | - | ||||||||
(+) M&A expenses | - | 5.0 | - | 10.3 | - | ||||||||
(+) Tax impacts from non-recurring items | (22.8) | (1.7) | - | (3.5) | - | ||||||||
(+) Amortization of intangible assets | 136.5 | 123.7 | 10.4% | 135.3 | 0.9% | ||||||||
Recurring net income | 1,130.2 | 1,216.3 | -7.1% | 1,057.7 | 6.9% |
Note: amortization of intangible assets net of taxes, calculated at a rate of 34% applied to the deductible portion.
MAIN ITEMS OF THE CONSOLIDATED BALANCE SHEET AS OF 03/31/2024
Assets, Liabilities and Shareholders' Equity Accounts
The Company ended the quarter with total assets of R$48.3 billion, a decrease of 2.3% compared to Dec/23. Cash and cash equivalents and financial investments (current and non-current) totaled R$18.9 billion, an increase of 3.1%, mainly reflecting the increase in the volume of collateral deposited in cash (with its counterparty in current liabilities). The cash position at the end of the quarter included R$292.5 million in interest on capital paid in early April.
At the end of 1Q24, B3 had gross debt of R$14.1 billion (83% long-term and 17% short-term), corresponding to 2.2x the recurring EBITDA for the last 12 months.
Shareholders' equity at the end of the quarter was R$19.9 billion, consisting mainly of R$12.5 billion in capital, R$2.2 billion in capital reserves - the same amount as in Dec/23, and the income reserve of R$5.3 billion, also the same as in Dec/23.
OTHER FINANCIAL INFORMATION
CAPEX
During the quarter, investments of R$32.6 million were made. These investments were mainly used for technological upgrades in all B3 segments, which include investments in capacity, security and the development of new products and functionalities.
Distributions to shareholders
On March 21, 2024, the Board of Directors approved the payment of IoC in the amount of R$292.5 million, paid on April 5. In the quarter, share buybacks were made under the 2024/2025 Buyback Program in the total amount of R$236.1 million, which, combined with the IoC, totaled R$528.6 million returned to shareholders in the period.
SUSTAINABILITY
During 1Q24, B3 released the Company's Annual Report, following the best market practices of GRI, SASB, IIRC, SDGs and TCDF. The document was published in a timely manner in March, following market best practices, and was subject to external assurance.
PUBLIC INFORMATION | 7 |
CONSOLIDATED INCOME STATEMENT
(In R$ thousands) | 1Q24 | 1Q23 | 1Q24/1Q23 | 4Q23 | 1Q24/4Q23 | Neurotech¹ | B3 - Neurotech | ||||||||||||
(%) | (%) | (1Q24) | |||||||||||||||||
Total revenues | 2,466,317 | 2,460,480 | 0.2% | 2,493,567 | -1.1% | 30,341 | 2,435,976 | ||||||||||||
Listed | 1,398,735 | 1,538,944 | -9.1% | 1,419,200 | -1.4% | - | 1,398,735 | ||||||||||||
Cash Equities and Equity Instruments | 856,725 | 922,207 | -7.1% | 853,220 | 0.4% | - | 856,725 | ||||||||||||
Trading and post-trading | 733,620 | 776,621 | -5.5% | 725,277 | 1.2% | - | 733,620 | ||||||||||||
Depository | 42,168 | 33,981 | 24.1% | 39,297 | 7.3% | - | 42,168 | ||||||||||||
Securities lending | 47,727 | 82,095 | -41.9% | 57,630 | -17.2% | - | 47,727 | ||||||||||||
Listing and solutions for issuers | 33,210 | 29,510 | 12.5% | 31,016 | 7.1% | - | 33,210 | ||||||||||||
Interest Rates, FX and Commodities | 542,010 | 616,737 | -12.1% | 565,980 | -4.2% | - | 542,010 | ||||||||||||
Trading and post-trading | 542,010 | 616,737 | -12.1% | 565,980 | -4.2% | - | 542,010 | ||||||||||||
OTC | 395,809 | 349,512 | 13.2% | 399,005 | -0.8% | - | 395,809 | ||||||||||||
Fixed income | 259,171 | 222,966 | 16.2% | 263,284 | -1.6% | - | 259,171 | ||||||||||||
Derivatives | 75,212 | 75,294 | -0.1% | 76,907 | -2.2% | - | 75,212 | ||||||||||||
Other | 61,426 | 51,252 | 19.9% | 58,814 | 4.4% | - | 61,426 | ||||||||||||
Infrastructure for Financing | 147,993 | 110,674 | 33.7% | 153,168 | -3.4% | - | 147,993 | ||||||||||||
Technology, Data and Services | 509,803 | 461,200 | 10.5% | 521,991 | -2.3% | 30,341 | 479,462 | ||||||||||||
Technology and access | 305,920 | 279,027 | 9.6% | 292,546 | 4.6% | - | 305,920 | ||||||||||||
Data and analytics | 159,326 | 126,272 | 26.2% | 173,148 | -8.0% | 30,341 | 128,985 | ||||||||||||
B3 Bank | 21,206 | 32,227 | -34.2% | 31,099 | -31.8% | - | 21,206 | ||||||||||||
Other | 23,351 | 23,674 | -1.4% | 25,198 | -7.3% | - | 23,351 | ||||||||||||
Reversal of provisions and recovery of expenses | 13,977 | 150 | 9218.0% | 203 | 6785.2% | - | 13,977 | ||||||||||||
Revenue deductions | (244,989) | (251,080) | -2.4% | (251,384) | -2.5% | (1,714) | (243,275) | ||||||||||||
PIS and Cofins | (200,779) | (210,209) | -4.5% | (205,975) | -2.5% | (1,107) | (199,672) | ||||||||||||
Service tax | (44,210) | (40,871) | 8.2% | (45,409) | -2.6% | (607) | (43,603) | ||||||||||||
Net Revenues | 2,221,328 | 2,209,400 | 0.5% | 2,242,183 | -0.9% | 28,627 | 2,192,701 | ||||||||||||
Expenses | (927,082) | (851,844) | 8.8% | (1,072,838) | -13.6% | (29,669) | (897,413) | ||||||||||||
Personnel and charges | (356,779) | (320,239) | 11.4% | (357,480) | -0.2% | (19,411) | (337,368) | ||||||||||||
Data processing | (145,850) | (127,791) | 14.1% | (170,383) | -14.4% | (3,795) | (142,055) | ||||||||||||
Depreciation and amortization | (279,908) | (259,590) | 7.8% | (279,911) | 0.0% | (587) | (279,321) | ||||||||||||
Revenue-linked expenses | (68,595) | (63,281) | 8.4% | (69,269) | -1.0% | (4,176) | (64,419) | ||||||||||||
Third-party services | (20,796) | (33,571) | -38.1% | (47,717) | -56.4% | (852) | (19,944) | ||||||||||||
General maintenance | (6,932) | (6,735) | 2.9% | (8,232) | -15.8% | (168) | (6,764) | ||||||||||||
Marketing | (5,698) | (5,144) | 10.8% | (19,706) | -71.1% | (306) | (5,392) | ||||||||||||
Taxes and fees | (3,266) | (3,278) | -0.4% | (3,284) | -0.5% | - | (3,266) | ||||||||||||
Board and committee members' compensation | (4,188) | (3,829) | 9.4% | (4,071) | 2.9% | - | (4,188) | ||||||||||||
Other | (35,070) | (28,386) | 23.5% | (112,785) | -68.9% | (375) | (34,695) | ||||||||||||
Operating income | 1,294,246 | 1,357,556 | -4.7% | 1,169,345 | 10.7% | (1,043) | 1,295,289 | ||||||||||||
Operating margin | 58.3% | 61.4% | -318 bps | 522% | 611 bps | -3.6% | 59.1% | ||||||||||||
Impairment of assets | (67,595) | - | - | - | - | - | (67,595) | ||||||||||||
Equity in income of investees | (2,995) | (581) | 415.5% | 1,782 | - | - | (2,995) | ||||||||||||
Financial result | 45,374 | 142,145 | -68.1% | 24,538 | 84.9% | 537 | 44,837 | ||||||||||||
Financial revenues | 444,354 | 493,615 | -10.0% | 398,726 | 11.4% | 673 | 443,681 | ||||||||||||
Financial expenses | (390,293) | (365,775) | 6.7% | (386,571) | 1.0% | (136) | (390,157) | ||||||||||||
Net FX variations | (8,687) | 14,305 | - | 12,383 | - | - | (8,687) | ||||||||||||
Income before tax | 1,269,030 | 1,499,120 | -15.3% | 1,195,665 | 6.1% | (506) | 1,269,536 | ||||||||||||
Income tax and social contribution | (319,461) | (409,662) | -22.0% | (279,860) | 14.2% | 70 | (319,531) | ||||||||||||
Current | (345,710) | (368,409) | -6.2% | (350,401) | -1.3% | (382) | (345,328) | ||||||||||||
Deferred | 26,249 | (41,253) | - | 70,541 | -62.8% | 453 | 25,796 | ||||||||||||
Net income for the period | 949,569 | 1,089,458 | -12.8% | 915,805 | 3.7% | (436) | 950,005 | ||||||||||||
Net Margin | 42.7% | 49.3% | -656 bps | 40.8% | 190 bps | -1.5% | 43.3% | ||||||||||||
B3 Shareholders | 949,583 | 1,089,351 | -12.8% | 915,543 | 3.7% | (436) | 950,019 | ||||||||||||
Net margin | 42.7% | 49.3% | -656 bps | 40.8% | 192 bps | -1.5% | 43.3% | ||||||||||||
Minority interest | (14) | 107 | -113.1% | 262 | -105.3% | - | (14) |
- Includes intragroup revenues between B3 and Neurotech.
PUBLIC INFORMATION | 8 |
SUMMARY OF CONSOLIDATED BALANCE SHEET
ASSETS | 03/31/2024 | 12/31/2023 | LIABILITIES AND EQUITY | 03/31/2024 | 12/31/2023 | |
Current assets | 18,424,340 | 18,828,942 | Current liabilities | 9,532,458 | 12,154,194 | |
Cash and cash equivalents | 1,664,174 | 1,788,906 | Collateral for transactions | 3,869,261 | 3,617,169 | |
Financial investments | 15,286,575 | 14,160,858 | Financial instruments for hedge | 40,639 | 9,608 | |
Others | 1,473,591 | 2,879,178 | Loan | 2,384,247 | 4,250,267 | |
Long-term Noncurrent | 14,878 | 14,878 | Others | 3,238,311 | 4,277,150 | |
Noncurrent assets | 29,844,053 | 30,577,802 | Noncurrent liabilities | 18,863,193 | 16,981,329 | |
Long-term receivables | 2,422,619 | 2,836,883 | Debt issued abroad | 11,705,257 | 9,759,402 | |
Financial investments | 1,982,215 | 2,417,923 | Deferred inc. tax and social contrib. | 5,746,705 | 5,845,307 | |
Others | 440,404 | 418,960 | Others | 1,411,231 | 1,376,620 | |
Investments | 643,937 | 647,353 | Equity | 19,887,620 | 20,286,099 | |
Property and equipment, net | 842,661 | 872,894 | Capital | 12,548,655 | 12,548,655 | |
Intangible assets | 25,934,836 | 26,220,672 | Capital reserve | 2,165,549 | 2,208,753 | |
Goodwill | 24,414,630 | 24,459,017 | Others | 5,160,841 | 5,516,102 | |
Software and projects | 1,520,206 | 1,761,655 | Non-controlling interests | 12,575 | 12,589 | |
Total Assets | 48,283,271 | 49,421,622 | Total liabilities and equity | 48,283,271 | 49,421,622 | |
PUBLIC INFORMATION | 9 |
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B3 SA Brasil Bolsa Balcao published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 22:14:22 UTC.