SGX posts 30.1% rise in first-half profit to $284.6 million

SINGAPORE – The Singapore Exchange (SGX) reported a 30.1 per cent increase in net profit to $284.6 million for the first half of financial year 2023, from $218.7 million a year earlier.

On Thursday, the bourse operator said the year-on-year increase in net profit came on the back of 9.6 per cent growth in revenue to $571.4 million, driven mainly by an increase in derivatives trading and clearing revenue, and treasury income.

Earnings before interest, tax, depreciation and amortisation for the half-year grew 9.2 per cent to $334.1 million from $306 million.

Earnings per share (EPS) increased to 26.6 cents in the first half of 2023 from 20.4 cents in the corresponding half of 2022.

Excluding non-cash and non-recurring items, the bourse operator reported an adjusted attributable net profit of $237 million, up 7 per cent from the previous year.

Adjusted EPS stood at 22.2 cents.

SGX said these adjusted figures better reflect the group’s underlying performance, as the non-cash and non-recurring items have less bearing on its operating performance.

Derivatives revenue, which accounted for 30 per cent of total revenue, grew 21 per cent to $173.5 million from $143.8 million.

Fixed income, currencies and commodities revenue, which accounted for 27 per cent of group revenue, increased 35 per cent to $154.3 million from $114 million.

Notably, the commodities business recorded its highest six-month volumes in its flagship iron ore contract.

Meanwhile, operating expenses rose 10.1 per cent to $237.4 million from $215.6 million.

This was mainly due to higher total staff costs and increased technology expenses arising from SGX’s recent acquisition of foreign exchange trading platform Maxxtrader. Excluding Maxxtrader, total expenses would have increased by 6 per cent instead.

SGX has declared an interim quarterly dividend of eight cents per share, payable on Feb 24. The total dividend for the first half of financial year 2023 is 16 cents per share.

Despite maintaining its guidance for financial year 2023 expenses and capital expenditure, SGX said it expects full-year expense growth and capital expenditure to be at the lower end of its earlier guidance, where it projected an increase of 7 per cent to 9 per cent to $70 million to $75 million respectively.

SGX chief executive officer Loh Boon Chye said the group’s derivatives business has continued to outperform, with a 28 per cent year-on-year increase in revenue, driven by broad-based gains across asset classes and record volumes in key contracts.

“On the securities and fund-raising front, we are optimistic that activity will rebound as economic sentiments improve,” Mr Loh added.

As at 9.42am on Thursday, SGX shares were 0.44 per cent or four cents higher at $9.19.

THE BUSINESS TIMES