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Deutsche Boerse cautious after profits down in 2012

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(Globalpost/GlobalPost)

German stock market operator Deutsche Boerse expressed caution on Wednesday for the outlook for the current year after earnings were hit last year by the "challenging" market environment.

"If the situation on the capital markets improves, we see net revenues of more than 2.0 billion euros ($2.7 billion) this year," compared with 1.93 billion euros in 2012, finance chief Gregor Pottmeyer told a news conference here.

However, "if the environment remains unchanged, our net revenues will remain at the same level as in the second half of last year," Pottmeyer said, which would represent a drop over the year as a whole of about 5.0 percent.

Pottmeyer insisted, however, that Deutsche Boerse was "well-positioned" to continue growing over the coming years by boosting its activities in Asia.

Chief executive Reto Francioni said Deutsche Boerse's results last year had been hit by the "ongoing uncertainty about the global, eurozone and US economies," which had hurt investor sentiment.

Deutsche Boerse's group net profit fell by 24.6 percent to 645 million euros in 2012.

Net revenues were down 8.9 percent at 1.932 billion euros and operating profit, as measured by earnings before interest and tax (EBIT), fell by 16.6 percent to 969.4 million euros.

In the fourth quarter alone, net profit rose by 9.4 percent to 165.4 million euros, while operating profit declined by 19.8 percent to 185.2 million euros on a 12-percent decline in revenues to 447.7 million euros.

Deutsche Boerse is to cut its dividend to 2.10 euros per share for 2012, down from 2.30 euros per share the previous year.

Francioni also complained about the uncertainty over future regulation of the financial markets in the wake of the crisis.

Given the difficult environment, Deutsche Boerse unveiled a 70-million-euro cost-cutting plan earlier this month, including the loss of 250 jobs primarily in Frankfurt.

Some of the jobs would be relocated to other sites.

Separately, Deutsche Boerse and Swiss stock exchange operator SIX have decided to pull the plug on their joint venture Scoach, a trading platform for structured products such as certificates, warrants and reverse convertibles.

The two sides were unable to reach agreement on the conditions for the venture, a source close to the talks told AFP.

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http://www.globalpost.com/dispatch/news/afp/130220/deutsche-boerse-cautious-after-profits-down-2012