SGX second-half profit up 13.2% to $232.7m amid record full-year revenue

SINGAPORE (THE BUSINESS TIMES, REUTERS) - The Singapore Exchange (SGX) saw an improvement in earnings for the 2022 financial year, helped by its push towards derivatives product offerings amid a weak securities market.

SGX posted a 13.2 per cent rise in second-half net profit to $232.7 million, while operating revenue for the six months to June 30 gained 7.9 per cent to $577.4 million from $535.1 million previously, SGX said in a regulatory filing on Thursday (Aug 18).

Full-year revenue reached a record $1.10 billion, a 4 per cent increase as compared with last year’s $1.06 billion.

“Our record-high revenue was driven by higher derivatives volumes across equities, currencies and commodities, as our global customers increasingly used our multi-asset platform to navigate market uncertainties,” said SGX chief executive officer Loh Boon Chye.

Net profit rose 1.3 per cent to $451.4 million from last year’s $445.4 million over the same period.

Adjusted net profit, which excludes certain non-cash and non-recurring items that have less bearing on SGX’s operating performance, was $456.4 million for the financial year. 

This was despite slowing growth in its equities business, which in FY2022 contributed to 64 per cent of total revenue, or $698.9 million, down from 66 per cent the year before. 

Excluding the equities derivatives business, revenue from the equities cash business, which includes new listings, trading and clearing and corporate action, fell at a steeper rate, dipping 6 per cent to $388.4 million during the period.

There were 17 new equity listings raising $1.9 billion in FY2022 compared to just 11 raising $1 billion the year before. The bulk of the listing proceeds raised were by three special purpose acquisition companies (Spacs), which made their debut on the SGX in FY2022.

However, funds raised in the secondary market, amounted to just $5.7 billion in FY2022 compared to $16.9 billion the year before. In the secondary market, investors trade shares from sources other than the issuer. 

Daily average traded value and total traded value both declined by 6 per cent year on year, to $1.27 billion and $320.8 billion respectively.

As a result, the exchange posted a higher earnings per share in the second half at 21.8 cents versus 19.2 cents a year ago.

It proposed a final quarterly dividend of eight cents, the same as last year, payable on Oct 21. If approved, SGX’s total dividend for the year will stand at 32 cents per share.
Commenting on its outlook for the coming year, SGX said its portfolio risk management activity is expected to rise in tandem with the increasing risks in the global economy.

“Notwithstanding these risks, SGX Group maintains its medium-term revenue growth expectation of a high single-digit percentage range,” the SGX said. 

Shares of the company closed Thursday at $10, up 0.6 per cent.

Additional reporting by Kang Wan Chern