3 Key Points
—B3, the company that owns and runs Brazil’s stock exchange, is this earnings season’s quietest winner: its most recent quarter delivered a record recurring net profit of R$1.54 billion ($302M), up 33% year over year on record revenue, because every record day for the Ibovespa is a fee-collecting day for the exchange itself.
—The growth engine is volume, not price: trailing revenue is up 20% year over year to R$10.6 billion ($2.1B) with a 67% operating margin and 47% net margin — and Citi expects the company to hand shareholders about R$6.3 billion ($1.2B) in dividends, interest on capital and buybacks this year, raising its recommendation and target on the stock.
—The next test is dated: B3 reports second-quarter results on August 6, deep in a quarter in which the Ibovespa set repeated records — while the stock, at R$15.39, still trades 23% below its 52-week high and 30% below the R$19.96 consensus target, with rival exchange projects circling its near-monopoly.
B3 Profit Record: What Happened
