Gielda Papierow Wartosciowych w Warszawie SA
WSE:GPW
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Earnings Call Analysis
Summary
Q2-2024
In the second quarter of 2024, the Warsaw Stock Exchange reported revenues of nearly PLN 121 million, a 9% increase year-on-year. The financial market segment saw a significant rise, with revenues up by 17% to PLN 77 million, driven by a 37% surge in trading shares. Operating costs grew at a reduced rate of 6%, and the cost-to-income ratio improved by nearly 2 percentage points to 66%. Adjusted EBITDA grew by 8%. The company also paid a record dividend of PLN 3 per share. Strategic initiatives included launching the WATS transaction system, enhancing ESG services, and conducting consultations for new product introductions and potential M&A.
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[Interpreted] Good afternoon, ladies and gentlemen. A warm welcome at the Results Presentation Conference of Warsaw Stock Exchange. Our record high results for the second quarter 2024 Warsaw Stock Exchange was already published yesterday after closing of quotations. Today, I'm extremely pleased to welcome investors, analysts and representatives of the media here live.
We are very happy, you found the time to be with us either here or online. The hosts of our today meeting are: Tomasz Bardzilowski, President of the Management Board of the Warsaw Stock Exchange, a warm welcome; and members of the Management Board, Izabela Olszewska, Vice President of the Warsaw Stock Exchange; and Monika Gorgon. We also have Piotr Zawistowski, President of the Management Board of the Commodities Energy Exchange and Director of Investor Relationships.
My name is Robert Stankiewicz. I'm extremely pleased to chair this conference once again. After the presentation of our results, obviously, you will have time to ask questions. And if we have a long Q&A session, we will try to make sure that all answers are provided on our website after the press conference is over. Now I would like to hand over to Tomasz Bardzilowski, the CEO.
Good afternoon, ladies and gentlemen. I would also like to say a very warm welcome at our conference focused on the results of the second quarter 2024. Our financial results in the second quarter, particularly satisfactory because of the record high revenues achieved by the group at almost PLN 121 million, which is a 9% year-on-year growth. Those revenues were mainly driven by the financial market.
Revenues from the financial market increased by almost 17% year-on-year, up to PLN 77 million. And here, this happened mainly owing to very significant growth in trading and shares of the Warsaw Stock Exchange. This growth reached 37%. Also, one of the factors that contributed to this good result in this segment was a two-digit growth in the sale of data. In the commodities market segment, we had stable revenues at PLN 40 million. In this quarter, we were also particularly satisfied about the level of operating costs and the fact that we managed to reduce the dynamics of cost increase. It was 6% year-on-year. Operating cost at PLN 80 million.
Cost to income ratio dropped year-on-year to 66%, by almost 2 percentage points. And this decrease is much more visible if you make a quarter-to-quarter comparison. EBITDA adjusted by one-off events, grew 8% year-on-year, and this growth accelerated compared to the growth which we had in the first quarter to PLN 47.5 million. And this one-off event was the write-off of intangible assets at PLN 36 million. Reported EBITDA dropped by 5% to PLN 41.7 million and net profit adjusted by the one-off event dropped by 1% to PLN 44.5 million. And this decrease was affected by the lower balance of financial income and expenses. This was the result of the situation in the market and the provision for potential tax payables.
In the holding company, we had a revenue of almost PLN 40 million, which is 11.6% drop year-on-year. As regards key corporate events in the second quarter, we experienced changes in the Management Board of the Warsaw Stock Exchange. I would like to give a warm welcome to Mr. Slawomir Panasiuk, who is responsible for IT and Technology matters. And we are waiting for the consent of the financial supervision authority for the appointment of two further management Board members. We are extremely pleased of the new members of the Supervisory Board, including Wieslaw Rozlucki, who is a legend in the Polish capital market, who joined our Supervisory Board and Waldemar Markiewicz, who is the President of the Chamber of brokerage houses, a person with vast experience in this market as well.
I would also like to welcome Piotr Listwon, who is the CEO of the TGE. And we also have Mariusz Buraczynski joining and Mr. Stankiewicz. Of course, an important element of our equity story is the dividend, which we paid out for last year. Well, actually, it will be paid in August PLN 3 per share, one of the highest dividends in the whole history of the Warsaw Stock Exchange. It was paid out at the upper limit of our dividend policy range. And we, of course, hope that the Warsaw Stock Exchange will remain a company with a very attractive dividend policy.
A few weeks ago, we also announced the launch date -- the production launch date of our new transaction system, WATS System. And this date was set for the 10th of November next year. Slawomir Panasiuk will talk you through in greater detail. As regards operating results in the second quarter the Warsaw Stock Exchange continue to be among the leaders of the Warsaw of the European Exchanges with the dynamics calculated in euros, reached 44%, which was one of the highest growth throughout Europe. We are also happy with the maintained high rate of trading that is calculated as the ratio of trading session value to turnover. And that places us at the very top in the ranking of European Stock Exchanges.
If we look at trading and P&L, we had a growth of 37%. And the principal driver of the revenue growth in the Financial segment was the revenues from share trading, a 31% year-on-year growth. We had a slight decrease in -- out of trading session revenues. In the derivative segment with WIG20 being the key contract 2% drop year-on-year here, which was due to lower volatility in the market.
This lower volatility also characterized many other markets this year. You know this volatility increased in August, which you will probably also see in the volumes in our markets. Revenues from Trade and Derivative instruments decreased in proportion to the decrease in the volume on WIG20 and amounted to nearly PLN 5 million. We had an increase in debt market and the BondSpot market, Poland.
The growth year-to-year was very high and mainly because of the new player in the market. This is the Ministry of Finance. In terms of the non-treasury securities, again, we've seen the growth in issuance over 100%, year-to-year to nearly PLN 11 billion, and we were also seeing a further growth in the ESG bonds, Warsaw sustainable segments. At the end of the quarter, we had over PLN 20 billion in instruments traded. The revenue was up 6% year-to-year. This is the revenue on trading in these instruments and this is nearly PLN 4 million.
Now moving on to the primary market. The IPO value continues to be fairly low. SPO likewise, a higher -- slightly higher activity was on the ABB market. In Q2, there were two depots. It was a transfer from the NewConnect market to the Main Market. And we had 3 depots at the new market. Our revenue from services to issuance were up year-to-year, PLN 6 million. And again, looking at the IPO market, let me draw your attention with -- there is a lot going on across Europe. In Q2, the value of IPL was up by 400% year-to-year, across Europe. And we expect that the same rebound will come to Poland probably in the second half of 2024.
Now let me turn the floor to Piotr Listwon, who will discuss TGE volumes
Good afternoon, ladies and gentlemen. We've seen the increased trading in the gas market, and at the same time, the decline in trading volume and electricity. But now let me revisit individual commodities one by one, starting with electricity. Q2 showed 30 terawatt hours, which is a decline quarter-to-quarter by 6% and 13% year-to-year. This is due to the lowered activity of the market participants, including the spot market. And over the past months, the stability and electricity prices have not truly triggered higher volumes and -- in the TGE market, we do believe that the regulatory support but will help sustain higher liquidity in the electricity market will have positive effects on our TGE. And when it comes to the renewable gas, 32.6 terawatt hours was Q2, and this declined by 4% quarter-on-quarter. This is a natural seasonality for this product. Q2 is no longer the winter season. Therefore, we have less contracting. But if we compare year-on-year, we see the growth by 26 percentage points. And it means that we, during that time, rebuild the inventory after the past year. And there's a stop for the additional capacity in electricity generation and heat generation. Now when it comes to RES property rights, there was an increase quarter-to-quarter 0.7 terawatt hours, 39% growth quarter-on-quarter. And again, we see the effect of seasonality of products. And the same for energy efficiency. The seasonality means that in June versus the last month of Q2, we have the settlement of green certificates and energy efficiency certificates and they are redeemed by the companies that need to -- required to do so. But when you look at the year-on-year picture, there was a decline in the property rights market because the requirement level was reduced from 12% to 5%. So it was quite a drop. And then there is a decline in consumption of electricity in '20 to '23 by the [ update occurs ]. I also mentioned energy efficiency. And here, we have excellent performance quarter-on-quarter and also year-on-year. And as I mentioned earlier, this is due to the seasonality feature of the market. And also the fact that energy efficiency certificates were -- had a good pricing, even over PLN 4,600 per kilo of the equivalent oil-- per tonne of the equivalent oil.
Now when we look at the financial performance, the financial market, the increase in trading revenue was driven mainly by the higher trading volumes. And hence, our revenue was up by nearly 20%. In addition to a very strong stock market, let me draw your attention to a better -- or increased revenue year-on-year in the other category. This is where we have new products like ETFs and other structured instruments that are quoted on the stock exchange, and also issuers that are present on the GlobalConnect market. So hopefully, this category will continue to grow at the dynamic rate.
Now let me also draw your attention to the fact that our data sales were doing quite well. We believe that after summer, this segment will be also growing, the sales of our data -- financial data. There was a decline in revenue and our Armenian AMX operations, mainly because of the regulatory changes that had to do with deposits. Now in the commodity market, Q2 showed stable revenue from trading quarter-to-quarter and year-to-year, and this is something that makes us happy. However, at the same time, as I mentioned earlier, when I discussed the volumes, we've seen the decline in revenue from the electricity market segment. And this is both year-on-year and quarter-on-quarter. And this is because of the fairly poor volumes on the spot market. We had a record high year in 2023 and then there was a decline year-on-year, also when it comes to the property rights. But when we speak about the electricity trading and property rights for RES, well, that was offset by good performance of the gas trading. When we speak about the settlement of transactions, we were down 5% year-on-year. And this is mainly due to the fact that there was less trading on the electricity market. And this is a natural consequence because the trading volumes translate directly into revenues because the rates are actually correlated to the volumes.
Revenue from operational registered PLN 6.8 million, and we were up by 3%. And -- again, this is the redemption of green certificates, 2 terawatt hours and the increased year-on-year of the transactions wherever [ register -- up origin ]. And as a result of the dynamic growth in Q2, I'm speaking about the revenue from the financial market. And that was a major contribution to the total revenue mix of the GPW Group. It was up by nearly 10% quarter-to-quarter. And now I want to draw attention to our revenue from information services.
Now let me also highlight the revenue that are independent of the financial market and commodity market. And this is nearly 23%. This is in Q2. This is a slight decline year-on-year, but we would like to make sure that this section of revenue -- recurring revenue that is independent on trading. We want to make sure that it's supposed and growing in the following periods.
Now moving on to the operating expenses. We can tell that the growth was curbed. So this is the first effect of the cost optimization program that we implemented. As you can tell from the chart in the left lower corner. Operating costs were growing at a slower rate than the revenue. This is the first time in 3 years. So hopefully, that will become a sustainable trend. This is our ambition and our goal. We want to make sure that the cost-income ratio will be declining compared to the prior previous years. Now operating expenses in Q2. The main driver was payroll. We were up over 20% year-on-year, but there were some other factors contributing to that overall picture. And hopefully, they will subdue over the upcoming quarters. And therefore, they will not cause additional increase. And once we sort of cleans the operating expenses, of that cost drivers, we will have more stable picture. And then the stable growth of cost was 11% in Q2.
Third-party services, 11% down year-on-year. This is one of the main outcomes of our cost optimization processes and improved cost discipline. I do hope that during the upcoming quarters, we will not see any major rebound in this line.
As regards to capital expenditures, they dropped in the second quarter and in the first half of the year. That results from certain reallocations in the second half of this year, we should expect an increase in CapEx. And throughout the whole year, we expect the total for the year will be significantly below the CapEx we recorded last year, probably closer to what we had in 2022. Net cash value in the second quarter was almost 160 million. And currently, this amount is reduced by the dividend of 126 million that was paid out in August.
Now I would like to say a few words about what we are focusing on right now; what we are working on, on a daily basis; what are our current priorities and efforts are. The key element continues to be cost optimization and also reorganization of work throughout the group. We are now reviewing strategic initiatives. And we hope that by the end of this calendar year, we will have to close this review. In the business area, we're working intensely on developing new products. We want to expand our product range including introduce new products like ETF, new derivative instruments. We are also conducting consultations in which we are taking a very active part. These regard introduction operates into Polish market, and we hope that the first rate-type companies will soon have their debut in the market -- in the Warsaw Stock Exchange next year. We're also working on the development of our services and products related to ESG. We are active in acquiring new issuers. And one of our new initiatives in this field is IPO Bridge. That is networking meetings of representatives of private equity and venture capital funds, on the one hand; and capital market stakeholders on the other hand. We are actively engaged in a dialogue with ETF issuers. We want to increase the number of companies and the overall activity by acquiring new animators of the market. We are reviewing fees and our price list. We are preparing certain pricing promotions, which hopefully will announce to the market in the upcoming weeks. We are also carrying out a tentative analysis of transactions and M&A transactions. The acceleration of growth through selective M&A transactions fits into our overall strategy. But we will focus on financial services. And now primarily on the Polish market. In IT, we are working on WATS system, and we have also started the implementation of a new financial and accounting system. As all companies active in the financial market, we are working on the implementation of the EU directive related to DORA -- directive related to digital resilience. We are engaged in extensive efforts related to the regional capital market. We are working with other stakeholders within the capital market. This is related to the acceleration of the growth of the Polish Capital Market. This work is coordinated by the Ministry of Finance but we have participants of the market engaged in it and the participants of the financial supervision authority as well. We, as Warsaw Stock Exchange are engaged in consultations related to the development of the Ukrainian capital market. For sure, for us, that will be a relevant area strategically speaking. Also, we have initiated cooperation with regional exchanges in order to enhance our business collaboration with stock exchanges and entities within the market infrastructure in Central and Eastern Europe. We are also engaged in consultations regarding the introduction of solutions, the Union of Capital Markets. We see a certain acceleration in talks and initiatives in this field. And we want to be well prepared before the launch of the Polish presidency in the European Union. For certain, this theme will be one of the topics discussed during our presidency. We are also working on the development of a new strategy of the Capital Group of the Warsaw Stock Exchange. We want to announce this new strategy to you still this calendar year. We want to make sure that the new management board members, which will hopefully soon join us, being bold in the development of this new strategy.
Now I would like to hand over to Slawomir Panasiuk, who can give us more details on the current efforts related to WATS platform and the scheduled further activities.
The project of building and implementing the transaction platform WATS is now in its final stage. The important steps were completed this year. In April, we completed our work on the documentation for members of the stock exchange and other stakeholders. The recommendation was published in April, made available to members of the stock exchange and vendors. These are the key stakeholders in this project. It is an important step as it allows our customers and our stakeholders to restructure and prepare their own systems for collaboration, coworking with the WATS platform.
The next important milestone was the implementation date setting. It is a very important step because it allows all stakeholders to figure out their schedules. In July, together with the WATS project implementation committee, we agreed the implementation date. -- the date of 10th of November 2025 has already been mentioned today. This date was agreed with members of the Warsaw Stock Exchange and other stakeholders and the management board, and the Warsaw Stock Exchange decided to have this launch on the 10th of November 2025. Another important element is the support to our clients, to our members in telecommunication connection to our new data center to the testing environment of the platform. This support is continued, and we plan to continue this kind of support. By the end of the year, we plan to have completed all development work within the transaction platform in order to stabilize the system, to make it possible to carry out testing with members of the Warsaw Stock Exchange and other stakeholders, whose test would start at the turn of this next calendar year, and would last till the -- their implementation of the system in November. Such a schedule allows us to keep the deadlines and all stakeholders will have sufficient time to carry out the necessary testing. The platform now will be implemented in all markets regulated by the Warsaw Stock Exchange as well as BondSpot.
In the meantime, we will work on updating and reviewing further development plans for the call WATS platform. And next year, we will start working on the new version of the platform. Thank you.
To us, financial education has always been a priority and it will continue to be high on our priority agenda. We would like to share more about the initiatives that we have in this area. And there is quite a lot to talk about over to Ms. Monica Gorgon.
We would like to draw attention to our commitment to education. This is not only our statutory activity, but this is also an important function to build confidence in the financial market. And during the year of the financial education, we had over 100,000 people participating across different education activities that we offer. And we can tell that the young generation is particularly active. The school-based Internet Study Exchange Game caters almost 30,000 students and 1,000 schools. Another project that caters to students, Index Investment Challenge also had a great turnout, 3,000 students and nearly 200 universities participating. As far as that, our initiatives are concerned, I would like to highlight our most recent project, Investing on Holidays. Despite the holiday season, we launched the competition together with a Bankier.pl portal. And this competition attracted over 6,000 participants. All these things together show that we have a growing interest in education that is geared to financial markets and investing.
Right now, we would like to share with you a framework for business development of TGE Exchange. Basically, we identified three segments here. We want to develop and expand the current offering that TGE has for market participants to align it with the market participants, and we want to be aligned with the ongoing energy transition. We want to increase the spectrum of products and services offered within the group, just to maximize the participation of the share of our customers in the trading of both TGE and across all markets in the group.
So -- but most trading actually is done at our platforms. For that reason, we have to -- in the pipeline, the start of trade and clearing of 15-minute instruments that will support the development of RES trading. We also want to increase the IRGiT’s margin model for spot markets to align ourselves with European developments. We will start working on the pioneering development for flexibility services platform. These discussions first have to be done with the regulator. And another interested party in this project is a transmission system operator and the DSO. And finally, the last item under this pillar is the development of the electricity and gas futures. We do hope that having futures available, we will be able to boost substantially the volumes of our trading.
The second pillar and the business development plan means that we will continue to support the regulator with the regulations that sustain and support liquidity and competitiveness of our trading. One of the ways to do it is to have mechanisms that stabilize our products, like the certificates of origins. We do see the outcomes of the prior work and consultations with the regulators and legislator. There are some projects that actually increased the mandatory level of green certificates. And we are actually consulting on the projects that should also improve the competitiveness of the gas market. That will have to do a lot with the revision of the regulation on mandatory inventory. And then we do the same for the electricity market, to improve supply in electricity market.
And the last but not least, we want to continue to support the development of the RES sector, including our guarantees of origin. So we want to have the new sources included in the system, and we also want to go cross-border with that. We want to develop indices dedicated to the RES sector, and we want to commercialize them, and we want to work with other stakeholders on the standardization of PPA contracts or ePPA agreements. Thank you, Piotr.
And finally, I would like again to highlight the priorities of the management Board, strategic priorities. First of all, to grow the share of the capital market and the overall financing of the Polish economy. We want to develop an offering that we have to offer attractive instruments to investors who want to attract new issuers across different segments and areas. As we said, it is important to continue our education mission to disseminate knowledge of the capital markets in the general public, and we want to protect efficiency and security of the exchange and the trading in our exchange. We want to launch the new trading platform. This is part of this effort. And finally, what is really important is to build the value for our shareholders and stakeholders likewise. So it is our ambition to improve our financial performance, to keep cost discipline, and we want to make sure that Warsaw Stock Exchange continues its attractive dividend policy. Thank you.
President, thank you so much for sharing the presentation on the record high results of the Warsaw Stock Exchange. Now it's time for Q&A. We do have questions from experts, from analysts. So let me start with the question that we got from Mikolaj Lemanczyk, he's a bank analyst.
Question number one. I think that this is something that everyone is interested in. What are we going to expect as an outcome of the review of strategic options? Are you going to close or sell off some projects? And are you going to show some impairments or write-downs as a result?
Well, thank you for this question. As I said the review of our strategic initiative is going on. There are many projects that we have to review. What we may say at this point is that in certain areas, we made a decision that as a stock exchange. We are not going to develop our business there. For instance, crowd funding is not our core competence. I personally believe that crowd funding is an important part of the financial market ecosystem, but we believe that the stock exchange is not the place where that should be directly supported. So we do consider a possible strategic investor, but could be identified for the crowd funding. And the same for GPW Ventures. This is another project, another initiative, where Warsaw Stock Exchange was supposed to manage the VC. VC fund that would invest the funds of the Ministry of Agriculture. And the idea was to make investment in the agritech sector companies. We believe that this is a very enticing and interesting initiative. But again, it is our opinion that the stock exchange is not the place, and doesn't have the best competence to manage venture capital funds. And we don't want to develop this set of skills in the stock exchange. There are other players that can bring it to the table. For instance, PFR, Polish Development Fund ventures. As far as other companies go, as I said, the review continues. We do hope that in some of the companies, we will see some acceleration of the revenue growth or we will start to commercialize their operations, and we will see first revenue generated. GPW, they should start its business operations swiftly once the Warsaw Stock Exchange assigns to it, intangible rights. So the rights should produce intangible assets. And that should happen over the next few weeks.
Okay. The next question is of similar nature. This is also in bank and cost optimization. Which areas are most promising when it comes to cost optimization?
With regards to the cost optimization, I have to say that this is a broad-based project. And I believe that we will continue this project. Perhaps we will intensify it once our new CFO, will fully join the Board. We do see the first outcomes, especially first party services like the cost of advisory services. When it comes to the payroll costs. Well, this year, we have some developments that boost the payroll cost. We also reorganized our operations, so we have severance pay that needs to be taken care of. So hopefully, over time, this particular cost item will decline next year.
Let's stick with the topic of costs. A question from Miguel Dias, Wood & Company. If we look at the cost, we see stabilization of personnel costs with decreasing third-party services. At what level do you see cost-to-income ratio throughout 2024? And what further steps should be expected on the cost side?
We will try to make sure that the ratio cost-to-income ratio is lower than it was last year. But we are also dealing with some extra costs as we have told you, we launched the implementation of a new financial and accounting system. We have consulting advisory costs related to a variety of initiatives. There are also some audits, which are being carried out right now. And additionally, we are carrying costs, just like all companies in the financial market, costs related to DORA Directive implementation. So I think a more significant change in the cost-to-income ratio we will be able to talk next year. For sure, it will be lower this year than it was last year, but the decrease should be even more visible next year.
Now we have a series of questions to Piotr Listwon. That is also something that keeps recurring in questions from analysts. Revenues from commodities were flat year-on-year. What revenue dynamics does the TGE expect next year?
Thank you for this question. when discussing the results for the second quarter this year, I pointed out seasonality in some products we offer and some participants register trade. Most typically, historically speaking, we have seen an increase in dynamics at the end of the year for energy and gas. So we expect greater volumes on those products at the end of this year. And a major trigger that releases volumes in this market are regulations. We, as a regulated entity have to follow a number of regulations. And as already mentioned during the presentation, works and consultations are being carried out regarding the mechanism to increase the supply of energy in the exchange market. If such works are concluded in the near future, that would have a positive impact on the volume of trading, and correlated to that, prices and revenues of our group.
Let's stick to TGE for a moment. What is the situation like with the obligation for electricity trading?
Yes, that shows how important this trigger is. I have mentioned work being in progress. Ministry of Climate and Environment, which is responsible for the relevant changes in law has carried out a number of consultation and has carried out a number of surveys with entities in this market. The results of those surveys are being studied at the moment so that the ministry can put in place the appropriate mechanisms. The reintroduction of this obligation is quite simple, technically speaking, but there is a series of exclusions regarding various kinds of electrical energy generation. So before anything is introduced, those exclusions have to be thought out very carefully. In the past, historically speaking, the obligation was never at the target level, really, it reached 40%. So we are still working on this -- not we, the Ministry is still working on this. But as of now, there has been no draft law, nor bill that would actually introduce this obligation.
Let's stick to questions from mBank what is the reason of the quarterly increase in revenues from information sale? And is that a normal level?
We are happy about the growth in information sale and the sale of data above the market. These revenues are not fully correlated to trading. Such revenues is something that we want to increase. Quarter-to-quarter, we saw an increase. It was slightly higher that would result from a longer-term trend. And that was because in the second quarter, we obtained, we collected certain amounts, dues and receivables, we managed to get higher revenues related to this activity, this growth or the difference between the trend and the actuals was between PLN 0.5 million and PLN 1 million in the second quarter.
Now a question from Wood & Company. What was the reason of the write-off on GRC, that was the write-off that you recorded?
Let me hand over to Slawomir Panasiuk to answer this.
A few years ago, the management Board of the Warsaw Stock Exchange made a decision to try to commercialize GRC. That is related to risk management, compliance risk management. And the intention was to have the application developed within the stock exchange. And after a few years of efforts to commercialize, now the Management Board decided not to continue commercialization outside the stock exchange. We plan to continue to use this solution within the stock exchange. So considering the intangible cost and lack of potential revenues, we decided to make a write-off, impairment write-off and the application will continue to be used by the Warsaw Stock Exchange, but without putting it on the market, without incurring additional costs for its expansion for third-party customers.
Let's stick to cost-to-income ratio. There is a question from InfoStrefa. When will this ratio reach 50%?
We would very much like this ratio to reach levels we had before 2017. But we would also like to bring your attention to the fact that one of our key costs are personnel costs. And here, we are experiencing a certain pressure on salaries that is in the context of inflationary issues. And in many areas or the Warsaw Stock Exchange did not increase its prices. You are asking about a decrease in fees. A lot of those fees are expressed as absolute values rather than relative values. And those absolute levels have not been increased for years now. That also contributes to our higher costs. But in recent years, the key factor behind cost growth were various strategic initiatives. I hope that the impact of those initiatives on costs will diminish. And some of those initiatives will start generating revenues rather than losses to EBITDA.
Another question from Wood & Company. What is the prospect of IPOs for this year at the Warsaw Stock Exchange.
The brokerage houses are perfectly aware of the developments in the IPO market. I hope that there will be more of those offerings with IPOs return to our market. I would like to say that in my opinion as a market practitioner, the key variable is the demand side. So if we see capital available to issuers in the market. If the cost of this capital is lower than it is right now, for sure, there will be companies willing to get into the stock exchange and have their IPOs. There were some announcements of plans for IPOs. And we hope that the volatility of the recent weeks will not affect any change in schedules. But the real revival in the primary market can be expected only when the cost of capital is lower. That is when market interest rates go down. At the present level, interest rates cause significant competition in bank deposits, treasury bonds are competitive to what can be offered in short term in return rates by the capital market. The capital market and our indices have anyway, recorded impressive growth over the last 2 years, over 100%. And since mid-October, Poland has continued to be among the top global stock exchanges.
Let's revisit the topic of strategy. [ Reuters ] has just asked about the new strategy that you want to share by the end of the year. But are you going to share it in Q3 or Q4?
Well, as I said, we are waiting for the full management Board to be present and on board. So -- but everyone is involved in developing the new strategy. So perhaps there will be two steps. Perhaps, first, we will share some strategic directions and overall assumptions, while specific strategic goals and financial ambitions will probably take more time to consider and process, so probably end of the year.
Okay. Now we have a question about TGE, Piotr, over to you. And the changes in the price list of electricity trading. The average fee was down more than 10% quarter-on-quarter. This is a question from [ Trigon. ]
No, we have not modified the pricing this year. The only change in the price list that was introduced after a long time was in the first half of 2023. It was like the new rates for our fees and for the clearing house. The average rate, though, may actually change since our services when it comes to trading are actually offered together with our partners from -- in the European market, NEMO, because the spot market is part of the European market. So -- sometimes the other party do the transaction is not our customer. So the trading volume may go up, but the rates may not because they may be shared with another player. So depending on what is the structure of transactions, whether this is Polish to Polish player or whether this is a Polish customer and third-party from another country, then the rates may vary.
Now let's take a question about trading. But this time, it's about BondSpot. More trading, but it didn't translate into more revenue. Why? Why not? This is question from Wood & Company.
Well, increased trading volume, that was driven by the new player, but as the Ministry of Finance. Well, based on my information, I believe that we are still in the promotional phase, so to speak, so -- but that the market has time to sort of pick up the speed and really take up. So hopefully, once this promotional activities comes to the end, the proper revenue will reflect the actual increase in trading volumes.
[indiscernible] [ Reuters ] again, could you be more precise about the strategy? So what would be the timeframe for the new strategy? The current one is '23 to '27. And the upcoming one would be for what timeframe?
I guess this is still in making. So I think that you will share this information once we actually are able to communicate the strategy. I think that we will need to look at our goals and objectives that we have for the capital markets. And on the other hand, we have to look at our aspirations and ambitions when it comes to the financial performance and the improvement of our financial standing and overall the development of the business across the group.
Well, thank you for the answer. I think that we exhausted the key questions. If there are any additional questions coming on online, we will obviously take them and respond to them by e-mail [indiscernible] through both for the questions from the analysts and media.
Okay. One more question from an individual investor. When are we able to see the video with the presentation?
So let me take this question. Yes, the video from this presentation, from this press conference will be available on our website. So it will be available to the public at gpw.pl. This is where you can find them.
I would like to thank you so much for meeting with us today, and I would like to encourage you to keep in touch with our Investor Relations. We have the new head, Michal Kuzawinski, who's with us today. Michal is the new Head of Strategy and Investor Relations. He's been with us for several weeks. Welcome on board. Over to you, Michal.
Thank you. Well, yes, I'm happy to join you and happy to be on board. Well, the main thought of GPW always makes me think of the quarterly results whenever we have new issuance, new IPOs. And I do hope that under the term of this management part, we shall see more IPOs coming to the floor.
Well, just to prove to everyone, no further questions. My iPad is blank. So we can close the conference and the presentation of our quarterly performance. So enjoy the last day of vacation, and please join us at the upcoming conference when we are going to share Q3 results. And that's going to happen in the early days of November. Thank you for today.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]