Gielda Papierow Wartosciowych w Warszawie SA

WSE:GPW

Earnings Call Transcript 2023-Q1

[Operator]

Good morning, and welcome to this conference dedicated to the results of the Warsaw Stock Exchange Group for the first quarter 2023. This is a traditional format. We'll start with a presentation followed by your questions. We have CEO, Marek Dietl; Members of the Management Board, Izabela Olszewska, Monica Gorgon, Adam Mlodkowski, CEO of TGE, Piotr Borowski; and Piotr Kajczuk, Financial Director of the Warsaw Stock Exchange Over to Mr. Dietl.

[Marek Dietl, executive]

Good morning, and welcome. Thank you for being here today in such big numbers at this meeting. Before we begin the presentation of our business results and financials, I would first like to put the results in a broader context. First of all, the past quarter was the first quarter where our financial results included a significant contribution of the new business lines. We have launched over the past years at a total of PLN 90.5 million, which helped to achieve the second highest quarterly revenue in the history of our company.

Apart from the results, which I believe are quite strong. We look quite good at the bottom line in addition to significant one-off costs relating to the development of our strategy, which will be unveiled on the 25th of May, and we invite you to take part in our event taking place on site at the lobby of the Centrum [indiscernible] building. We have space, so please join us.

PLN 27 million, that was the net profit given the financial condition of our company and our dividend policy, we have recommended we want to recommend to the Supervisory Board and the general meeting a payment of PLN 2.7 per share of dividend for 2022. We still have good turnover on the main markets at nearly EUR 70 billion last quarter. This is good news because volatility was much lower. So the turnover at about PLN 1 billion per trading session is quite doable even in times of lower volatility. -- as volatility typically drives our results. But last quarter, volatility was low yet. The turnover was quite good. We have announced the date for production deployment of what's -- It is November 2024. And we want to take trading on our trading floor to a higher level and in time develop the same technology in other markets of our group. Our global connect market is developing quite well. We have 7 stocks in trading. The introducing market makeup is planning to launch more stocks on the market. We are technologically ready with the final testing -- better testing of the GPW private market platform. We are nearing completion of the system, and we expect that this technology will support strong and fast development of investment products. So that's the overview of the first quarter of the year. Looking forward, please join us on the 25th of May when we will present our strategy for the coming years. Thank you.

[Izabela Olszewska, executive]

Good afternoon. In my part of this presentation, I want to focus on business highlights. -- in the financial market in Q1 2023. In particular, turnover and investor activity across our markets. starting with the main markets in equities. EOB turnover in Q1 stood -- well, it dropped by about 30% year-on-year. However, please note that Q1 2022 was an exceptional quarter. At that time, war broke out in Ukraine. As a result, volatility was very high and turnover was high at that time.

So this represents a high comparative base. Quarter-on-quarter, we reported a 15% increase. Last quarter, was record breaking. It was the third best Q1 starting in 2022. That was the top quarter than Q1 2021, when we felt the impact of the COVID pandemic and #3 was Q1 2023. As Mr. Dietl has said, the average session trade in equities was quite decent, exceeding EUR 1.1 billion per trading session.

The average fee on the stock market was 2.09 bps remaining stable quarter-on-quarter. It shows that there's quite a lot of activity of traders using fees, promotional fees for liquidity providers, market makers HVP, HVF. The share of HVP, HVF participants in equity turnover was approximately 19%. Adding market makers, the liquidity providers represented about 30%.

New connect EOB turnover dropped by more than 38% year-on-year and increased by more than 30% -- apparently -- approximately 33% quarter-on-quarter. And I will be repeating the same reason again and again, a high comparative base in Q1 2022. On NewConnect, there's 1 additional trend, which actually fits into the objectives we follow on NewConnect the biggest and most liquid companies transferring to the main markets, something we are very happy with.

In 2022, nearly all new listings on the main market were transfers from newConnect and the same happened in Q1 2023, about 15% of companies listed on the main market have transferred from NewConnect. The same goes for structured products. This business line is growing pretty well. But quarter-on-quarter, we noted an increase. But year-on-year, there was a decrease compared to the very strong first quarter of 2022. I should also mention ETFs. This is an instrument, which is developing very well.

Last year, we reported turnover exceeding PLN 1 billion. In Q1 2023, our turnover remains strong. We want to grow this segment. We are looking forward to the -- coming into force of a new law, an act of Parliament, which will include some facilitations to the operation of Polish ETFs.. And we are also expecting further legislative work to make our ETFs equivalent in their legal status to their counterparts in other European countries. After meeting with ETF issuers, I can announce that we will be working on several new ETFs this year, the process of having the documentation approved is underway, so we cannot announce a date.

But we are expecting 1 ETF based on our domestic index and at least 2 ETFs based on other underlying. Now concerning the primary markets, in Q1 2023, there were 4 new listings on the main market. They were transfers from NewConnect. And there were 2 IPOs on NewConnect. We haven't yet seen a strong improvement in the IPO market, but we can see the first signals. There are companies which have transferred from NewConnect to the main market or opened a public offering in an IPO on NewConnect to raise equity. According to European reports, the IPO watch report by PwC shows that it's similar across Europe. So year-on-year, there was a drop in the value of IPOs by 40% and a drop in the number of IPOs as well, which shows that the turbulences continue, including the headwinds in the banking sector, which prevent this market from rebounding.

As for SPOs. Here, the situation is different. Last year, we had quite a number of SPOs by listed companies. In Q1 2023, again, further companies raised more equity, which actually fits into the functions of the exchange which not only allows companies to raise equity in an IPO, but also to continue with SPOs.

As for the derivatives market, let me comment on the conditions which were quite positive. Interest in derivatives has structurally improved. Q1 2023 was comparable to the very strong Q1 2022. We are happy to note that the turnover volume in WIG20 futures remain stable. These provide the highest margins for the exchange.

The share of proprietary futures traders participating in HVP, HVF programs was 7%. We can see a structural improvement in interest as derivatives and turnover are correlated with volatility despite the strong drop in volatility in Q1 year-on-year and quarter-on-quarter, turnover has remained stable. Now let me turn to our ESG and

our ESG strategy, which is part and parcel of our quarterly presentations. We are now implementing our ESG strategy. which was presented in late 2021. All our companies have operating plans. We are monitoring Scope 1 and scope 2 emissions from our activities. We offer a lot of initiatives for our employees as well as third parties.

We offer training, and we will soon present the integrated report of the Warsaw Stock Exchange Group, including specific KPIs regarding the implementation of our ESG strategy, 2022 will be the base year for our KPIs measuring the implementation of our ESG strategy. We have a lot of activities addressed to the market. We are working on a project with EBRD concerning the update of our ESG reporting guidelines, which assists listed companies. We are working on the sustainable finance platform launched by the Ministry of Finance, and we focus on ESG education by taking part in congresses, we've recently taken part in the Polish Climate Congress and the ESG and sustainability forum. So this is a key priority for us to help the market adapt to this new important trend. This is all from me. Thank you. And over to Adam Mlodkowski.

[Adam Mlodkowski, executive]

Thank you, Iza. Ladies and gentlemen, I will share some numbers on our financial -- the financial results of the Capital Group in Q1. As Mr. Dietl said in the beginning, we generated very satisfactory sales revenue up by nearly 2% year-on-year. As Mr Dietl said, PLN 9.5 million was the revenue generated by our new business lines, which is a very good prognostic. We also reported an increase in the commodity market. Piotr Borowski will share details later, up PLN 7.2 million year-on-year. That's the increase in revenue from the commodity market. The financial market did not perform as well, more on that later, as concerns the operating expenses, those increased 25% year-on-year, which may seem a lot, but -- as a matter of fact, this is driven by several factors, mainly the expansion of the scale of our business, the new business lines we have were to generate additional revenue, but also additional expenses.

Let me reassure you, however, that the impact -- the overall impact is positive. The new business lines generate high returns, but they are reported in revenue and expense lines alike. This is why we have a higher number. In Q1 2022, there was no revenue and no expense from these new business lines. So we have a different cost base. Additionally, we can see the impact of inflation due to all that due to the salary pressures across the market, not just in the financial industry, but across the labor market in Poland and in Europe, we have decided to offer salary raises to our employees, which were paid in Q2 -- sorry, the second half of 2022.

Comparing the numbers to Q1 2022, we can see an increase in salaries. And we also added more FTEs due to the implementation or other development of our strategy. But here in the consolidated results, we are reporting FTEs in AMX Armenia Securities Exchange, which we acquired in December 2022. So there's an increase in the external service charges as well as a result of the higher growth in operating expenses compared to revenue, our EBITDA of the Capital Group dropped by more than 31% year-on-year. But the -- while the percentage decline may seem high, it was expected. We were anticipating an even bigger dip.

As for the net profit, the percentage drop was lower than that in EBITDA due to higher revenue. Our higher financial income thanks to higher interest rates. I also need to stress that the net profit we delivered after Q1, PLN 27 million was 9% higher compared to the market consensus. Let's flip the slides. These are our financial results by quarter. You can see an increase in revenue and a drop in the margins, which I mentioned and will mention again. Now the next slide shows the revenue on the financial markets. As I said in the financial market, we reported a decrease of revenue quarter-on-quarter by more than 17%, mainly due to a decrease of revenue from trading in equities. But as you can see in the slide, on a positive note, the revenue from the segment as compared to Q4 2022, increased by more than 19%. And I hope that this trend will continue quarter after quarter.

We also reported an increase in revenue from other cash market instruments trading and an increase in other fees paid by our market participants, a bigger increase year-on-year. The revenue from listing remained stable year-on-year, but it increased 13.5% quarter-on-quarter. Finally, revenue from information services has been growing steadily by high 8% year-on-year.

On the next slide, before I hand over to Piotr Borowski, CEO of TGE, let me show a slide that we didn't have in our previous conferences. A similar slide was included in the appendix, but now we decided to show it to you as it might be interesting. It shows the diversification of our revenue mix. The diversification is quite strong. You can see the trends in the different lines.

Some of them are growing in the total share and some are dipping. There's a high share of revenue from the commodity market, which is broken down on the right-hand side. I will skip that and hand over to our TGE colleague in momentarily. However, 36.5% of our total revenue came from the commodity market. And nearly 4% was generated by the new business lines, specifically GPW Logistics and GPW Tech. There's also a small line of 0.8% of clearing revenue. While we don't have our own clearinghouse in the financial markets, which is different from the commodity market.

But that's the revenue generated by AMX, the Armenia Securities Exchange that we acquired a stake of including a stake in the central securities deposit in a clearing house. So this is the revenue reported here on the financial markets. That's all for me -- no. Let me first point to the chart in the top right-hand side of the slide, which shows the annual -- average annual growth rate of our revenue from 2009 to the end of 2022. 2009 was the year before to Warsaw Stock Exchange was newly listed on the Warsaw Stock Exchange in 2010. Over that period, the average annual growth of revenue was 5.3%. Now over to Piotr Borowski.

[Piotr Borowski, executive]

Good afternoon. Let me make sure that you can see the right slide, the commodity market turnover. I would like to share some comments because at the beginning of this year, the results of the initiatives we took in the electricity market last year, on the one hand side, the obligation of electricity producers to sell electricity on the exchange was lifted.

On the other hand, however; there were other regulations impacting the behavior of the energy market participants, in particular, a law, which regulated prices for end consumers and margins as well as acceptable costs and price caps for the wholesale market. All these regulations in aggregate, impacted the behavior and strategies of market participants significantly.

In electricity, trading turnover dropped. But if you look at the Q-on-Q trend, the electricity market is cyclical. And last year, it went through a number of actions taken by the government to try and prevent the electricity -- the energy crisis. But year-on-year, electricity turnover dropped in Q1 2023.

But as you can see on the right-hand side, the turnover mix on the market changed dramatically with huge increase in spot turnover and a major drop in forward market turnover due to the strategies followed by market participants, who are trying to prevent uncertainty, and were waiting with contracting until the delivery period, which is this year. In the gas market, the changes were less pronounced. Turnover dropped from 42.4 to 40.8 terawatt hours. The mix changed as well, but not as much as it did in the electricity market.

First concerns the property rights market. Renewable energy proper rights dropped from 5.7 to 5.2 terawatt hours mainly because last year, the obligation to redeem wide certificates was reduced.-- and that stifled interest in such certificates because sellers who sell to end consumers have a lower level of the obligation to redeem what certificates for the past period. So there's less demand to buy.

What is satisfying is that we can see a significant increase in turnover in energy efficiency certificates.

As for revenue, revenue is driven by turnover, but that's what I used to say. Let me rephrase that. For electricity, where turnover dropped, revenue increased due to 2 drivers. First, changes in pricing -- we communicated and announced repricing in steps. Some of the fees changed as of the first of January. others changed as of the month of March following the coming into force of the tariffs following a process of approvals.

The other driver is the change in the mix of turnover in electricity, with a much bigger share of spot as compared to forward transactions. The fees for the spot market which is typically more demanding and generates bigger cost, we operate the spot market 24/7 for the 24 hours per day, 7 days per week. So the unit fees for energy turnover are higher.

The change of this mix helped our revenue to grow. They grew much more for electricity than the volumes would suggest actually the volumes dropped. But -- the revenue increased more than the changes in prices would suggest. In the gas market, given the small drop in the volumes, revenue grew, thanks to repricing, which took place just like on the electricity market, though on a lower scale. As for property rights, revenue remained stable as the 2 factors offset 1 another increase in green certificats, sorry decrease in green certificates, increase in energy efficiency certificate trading.

Other fees here, the main driver was the new trend that occurred last year and continued into the current year, specifically new prices, new fees for the management of funds by the clearing house.

As the situation on the market clarified, the margins dropped -- the margins, which are called by the clearing house. Revenue from clearing -- the revenue increased due to a number of drivers, principally change in fees to equalize fees for electricity and gas markets.

Until this year, there were differences in the fees. but the fees were changed in the clearinghouse and the volumes changed in the market as well. As for the register of certificates of Origin, the growth in revenues, especially year-on-year was -- well, it just presented on the right-hand side. Actually, all activities in the register of certificates of origin reported increases both the number of issued certificates, number of redeemed certificates and also net turnover in guarantees of origin.

[Unknown Executive]

Thank you very much. Let's go back to the remaining financials. This slide presents in detail the change in operating expenses, OpEx, and novelty. We want to present to you some details on our CapEx quarter-by-quarter. As for the increase in operating expenses, as I said, the increase year-on-year seems very high, more than 25%, but the actual amount is EUR 17.4 million. That's the increase in OpEx in Q1 2023 year-on-year, but PLN 7.5 million of that number are costs relating to the launch and operation of the new business lines.

I mentioned that our revenue increased by PLN 9.5 million. On the other hand, our costs also increased by PLN 7 million. So this is a very profitable operation. We are very happy that this projects have launched, and we expect them to generate even better results in the future. But this also impacts our expenses.

Net of the new expenses relating to the new business lines, OpEx increased 14.4% year-on-year which is less than annual inflation. So I want to stress that you have no reason for concern if you look at separate results of the Warsaw Stock Exchange, OpEx increased below inflation. The biggest increase both in numbers and in percentages came from external service charges, specifically IT investments, advisory costs and the operation of GPW Logistics.

The second biggest cost item when it comes to the increase were salaries and employee costs. As I said, we paid salary raises last year, and we added more FTEs. The new FTEs are included or presented for AMX and they do have a financial -- an impact on our consolidated financials. But we added some FTEs in the group as well. mainly in the Warsaw Stock Exchange as well as in some subsidiaries.

That is due to our new activity or new strategic initiatives that we've been implementing. As for CapEx, our capital expenditure, which is capitalized. In Q1, CapEx stood at PLN 9.3 million.

Moving on to the next slide. This is just an overview of the contribution of entities merged by the equity method to our overall profit -- just to highlight, PLN 200 million -- a 200,000 increase in our share of profit of KDPW in Q1 and the share of loss of [indiscernible] in Q1 at PLN 147,000.

Moving on to the last slide. This presents our balance sheet. If you compare the total assets as on the 31st of March to end of year, there was a modest increase by PLN 160,000 mainly driven by higher financial investments of cash, higher VAT liabilities in TD due to higher revenue. And a higher fee to the Polish Financial Supervision Authority, KNF, and the impact of the consolidation of AMX. Thank you very much. That's all for the financials.

[Operator]

Ladies and gentlemen, let's now move to the Q&A. The first question is from Prague the Czech Public Miguel Dias Food & Company. The first question is about the share of investors in turnover. Last year, retail investors represented 17%. How about Q1? And the second question from Miguel is whether and when we expect some improvement in the IPO market.

[Unknown Executive]

Very good questions. Let's go to Izabela Olszewska. Iza, will you take them, please?

[Izabela Olszewska, executive]

As for individual investors, we collect and publish numbers once every 6 months, the most recent numbers are for the end of 2022. The share of those investors was 17%. While the turnover keeps growing, and the share of individual investors is shrinking. But in nominal numbers, it remains stable.

We are working hard to make sure that the pool of individual investors grows, we are offering them products they expect. Such products as good quality stocks as well as foreign stocks on GlobalConnect where we want to expand our offering steadily later this year.

These products also include ETFs, structured products and deliverings. Secondly, we offer a program, an analytical coverage support program. And this program includes new reports, new analytical reports, which are available free of charge for 65 different companies. We also host many investor conferences involving individual investors, GPW Innovation Day and other events on the stock exchange.

Mr. Dietl and a group of our employees will soon take place in the Wall Street Conference. So we also offer information services to our retail investors, including data on Yahoo Finance. So we are doing a lot to grow the pool of individual investors.

And your second question, IPOs. I think I touched upon this point when I presented my slides. We have not seen any clear indications to suggest that the IPO market has rebounded. And the situation is just the same across Europe. We keep on tracking the developments as for prospectus, 8 prospectus have been submitted to the Polish financial supervision authority. We haven't heard from the KNF in detail, but but we know 8 prospects have been submitted. Some companies are getting ready to be floated on NewConnect. We are in communication with very good companies. We would like to have floated on our markets. We hope that as soon as the market conditions improve and analysts from brokerage house is expected in the second half of the year and that the market will then become much more active.

[Unknown Executive]

we have a number of questions on OpEx and CapEx on the financials. Will you take measures to reduce the growth of OpEx. What is the expected OpEx in 2023? What is the impact of the new strategy on your OpEx? What is the expected growth in the headcount? And what is the expected growth rate of OpEx this year? Adam, will you take these questions, please?

[Adam Mlodkowski, executive]

Yes. So there's a number of questions. So let me go one by one. Could you remind me what the first question was, your measures to reduce the growth rate of expenses? As for the growth rate of expenses, as I said, please consider that the growth was largely driven by the expansion of the scale of our business.

So considering that we want to grow our revenue base as we will tell you next week when we unveil our new strategy, the new strategy provides for a significant increase of revenue from the new business lines. So this will obviously generate additional operating expenses.

But this is only 1 part of the answer. We can see the need to optimize expenses, both for the Warsaw Stock Exchange and the more mature subsidiaries. As for the new companies which are starting, and we want them to be agile and not burdened with high costs, as regards measures to reduce costs at the stock exchange or the bigger subsidiaries in our Group.

We want to take initiative and introduce or automate work. These initiatives are well underway. We have seen some good results of our robotics program, which is underway, we will also replace our IT systems with systems that allow for more automation of work. This includes the trading system was and our financial and accounting system as well as many other systems of auxiliary nature. Importantly, there's a big strategic initiative that we will discuss in detail next week to optimize processes, introduce some process management. This initiative is spread over time, but we have very high expectations.

And the expected impact has been measured by our consultant and our in-house team responsible for project management and I'm quite certain that these results will be achievable. Before we implement that program, however, we will need to pay expenses to have it put in place. But in the long term, efficiency will improve.

As for the expected OpEx and its growth, we have some forecasts put into our financial plan. But as regards the actual developments, this will depend on how much inflation drops and how soon. I hope this happens as soon as possible as this also impacts the job market.

The IT industry has seen a drop in salary pressures. We've heard about headcount reductions in the IT industry. So experts are now available of the -- but of course, in some segments, almost specialist positions, the experts are short in supply. We are also running some very ambitious projects such as Watts.

During the deployment period, Mr. Dietl has mentioned, we've announced an updated time line with rollout in Q4 2024. And this is when the system will go live. But until then, we will continue to incur higher costs. What was the second part of that question?

[Unknown Executive]

It was about CapEx, what are our expectations for CapEx?

[Adam Mlodkowski, executive]

As for CapEx, well, as we are running a number of strategic initiatives, -- and again, I refer you to the conference that will be held next week. We will announce our plans, we want to continue diversifying our revenue mix. We want to follow in the footsteps of large financial groups present on the capital market. So these initiatives will require some investment.

We have a CapEx plan that's been quite well measured the CapEx will increase significantly. Q1 CapEx was PLN 9.3 million, but we expect double-digit CapEx in the years to come, resulting, however, in additional business revenue and cost reductions.

[Unknown Executive]

And we have more questions. I think we can move to the next group of questions concerning the commodity market, Mikolaj Lemanczyk is asking whether TGE revenue fully reflects the new pricing. Was there a transitional period of promotional fees and what will the final impact of the repricing be fully measured in Q2?

To take these questions, no, the new pricing has not yet been fully implemented. I think the full impact will become -- will be understood in Q3. That's because some new fees were launched as of January, others as of February and March. So these are not represented in the quarterly numbers.

For some fees, we offered temporary promotions until the end of first half of the year. So the new fees unless we decide for business reasons to continue with some promotions or discounts. The new fees will fully be reflected in our numbers as of the first of July.

And 2 short questions about the commodity market. What is the volume of turnover in energy and gas expected this year given the changes in the obligation to sell on the exchange and the repricing? Second question about clearing revenue. What is the expected business performance of [indiscernible] this year.

Well, revenue from both segments is linked, related. So this is all about volumes. It's really hard to predict what's going to happen by the end of the year. One of the reasons is that the new rules implemented last year to protect energy consumers followed by the new rules applicable to margin and price caps for producers.

Those were implemented by the end of this year. Some European countries have extended those regulations. It's an implementation of EU rules actually. Some countries have decided to extend those regulations to cover the whole of next year, we expect that the rules -- well, we can see that the rule renewals did impact the behavior of market participants significantly.

So when it comes to uncertainty, which is not fully related to the market where we can predict trends. Regulatory changes are really hard to predict. When it comes to the impact on volumes and turnover by the end of the year. I wouldn't be responsible if I did that.

We have an interesting -- a number of interesting questions to Mr. Dietl about the competitive advantage of the Warsaw Stock Exchange compared to Euronext LSEG database. What are the competitive advantages of the Warsaw stock exchange in the coming years? And what is the competitive advantage of the Armenia Securities Exchange?

Let me start by saying that we do not compete directly with the stock exchanges you mentioned are direct competitive for us, investment banks, all banks which are systemic internalizers as well as MTF like platforms, multilateral trading facilities, would focus on the most liquid stocks and do not have to pay the cost of attracting issuers. They can offer low fees -- started to -- it's -- well, we are trying to defend our position against such competitors and their expansion. How effective that is depends on a number of factors, including regulation, European regulation.

Concerning fees for channeling traffic, our position is the best execution rules should apply across the board. So trade should take place on platforms, which are most efficient for clients in terms of both transactional fees as well as the cost of spread and the risk of execution of a trade. For the time being, regarding the stocks, for which, we are the primary trading market.

We are the ones to provide the best execution, the best probability of closing the trade because we offer the biggest liquidity, which is currently our biggest competitive advantage.

Our competitive advantage as a corporation compared to big exchange groups -- that competitive advantage relies on our agility. We are good at launching business segments that the big exchange groups stay out of or have not thought about or would take too much time to enter.

So, our agility, we think, will help us continue growing as a corporation, although, of course, the main driver why growth beyond our core business, which we're trying to defend and really don't expect to expand radically we are rather looking at an evolution.

As for AMX, that's different. It's a captive market, a closed market at this point, which is not open to competition of third parties. Paradoxically, the challenge there is to open up which will, of course, generate some exposure to competitors, but we want to build up this market at a completely different phase of growth.

What we expect will drive that market are very friendly regulations -- and they brought institutional consensus among the Armenian elites to build this market, which really gives us a lot of space when it regards trading and post-trade services. This is a vertically integrated company unlike the Warsaw Stock Exchange. So after the several years of -- the first years of implementing the strategy, we have drafted together with the EBRD for the AMX, the consensus remains strong, and the market will continue to be built.

So there, the challenges that attract clients and to expand the market while the risk of competitors is negligible. So we are trying to attract clients rather than compare ourselves here.

And if I may follow up, the competitive advantage should be really reinforced by the implementation of our new trading system, Watts, that I mentioned before. This system is designed to be the fastest trading system globally, an integrated state-of-the-art system written in a modern language, which will help to improve the quality of service, and it will be implemented at an international data center to which our members, investors from around the world are connected.

What's also important from the financial perspective is that the implementation of the new system will help us radically cut our IT costs, cost of maintenance and development that we are paying now. And we will be in a position to offer the system by commercializing it and selling it to others.

We have a question on the commodity market. How are you going to grow the agricultural market, what are the prospects for growth? What is the outlook for that market?

The agricultural market, as you can see, is not active. It is subject to turbulences. Those turbulences or uncertainties caused by the current conditions. The main product under consideration in the market was wheat. And this probably affects the perception of the market. As for the outlook, we have some products in mind. But the key expectation is to implement a forward market, which is the core market for agricultural exchanges worldwide. This is our main direction for growth -- expectations -- well, there is demand for the forward market. We know that from talking to our partners, traders, and a council that's been established to support the growth of the agricultural market.

And the last question, what can we expect of the new strategy? Is this going to be a continuation? Or are you going to present new ideas and initiatives?

We don't want to spoil your party. So please join us next week. You will find out more.

[Operator]

Ladies and gentlemen, we will stop now. If you have any further questions, please contact our Investor Relations team and join us on the 25th of May for the presentation of the new strategy. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]