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SGX Group posts 7% higher adjusted net profit for 1HFY2023, dividend unchanged

Jovi Ho
Jovi Ho • 4 min read
SGX Group posts 7% higher adjusted net profit for 1HFY2023, dividend unchanged
SGX Group has posted adjusted net profit of $236.8 million for 1HFY2023 ended December, up 7% y-o-y. Photo: Albert Chua/The Edge Singapore
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Singapore Exchange (SGX) Group has posted an adjusted net profit of $236.8 million for 1HFY2023 ended December, up 7% y-o-y.

Total revenue for the period, meanwhile, increased 10% y-o-y to $571.4 million.

Adjusted EBITDA rose to $334.1 million from $309.6 million, while adjusted earnings per share climbed to 22.2 cents from 20.7 cents.

Adjusted figures exclude certain non-cash and non-recurring items that have less bearing on SGX’s operating performance, says SGX in a Feb 9 press release.

The Board of Directors has declared an interim quarterly dividend of 8.0 cents per share, unchanged from every quarter since 4QFY2020, payable on Feb 24. This brings total dividends in 1HFY2023 to 16.0 cents per share.

Adjusted net profit excludes non-cash items such as a $27.0 million fair value gain from SGX Group’s investment in 7RIDGE fund, a $14.9 million writeback of earn-out contingent consideration for MaxxTrader and a $10.0 million recognition of investment in Climate Impact X (CIX).

See also: SGX maintains FY2022 earnings and dividend, claims 'natural right' to offer listing services

Total capital expenditure was $17.8 million, up from $16.5 million this time last year. “These investments include the setup of OTC FX infrastructure, and upgrades to our Titan OTC trade reporting system.”

While guidance for FY2023 expenses and capital expenditure remain unchanged, barring unforeseen risks, SGX Group expects full-year expense growth and capital expenditure to be at the lower end of earlier guidance of 7%-9% increase and $70 million-$75 million, respectively.

Equities

See also: SATS reverses into earnings of $56.4 mil for FY2024, plans final dividend of 1.5 cents

Equities revenue, comprising revenues from equities dealt in cash and derivatives, increased 3% y-o-y to $344.7 million, accounting for 60% of total revenue, down from 64% this time last year.

Equities (cash) revenue declined by 10% to $171.2 million, accounting for 30% (37%) of total revenue.

There were four new equity listings during the period, which raised $9.7 million. This is down from six new equity listings this time last year, which raised $1.3 billion.

Daily average traded value (DAV) and total traded value declined 7% and 8% y-o-y to $1.1 billion and $138.1 billion respectively.

Listing revenue of $15.1 million was down 13% y-o-y, while corporate actions and other revenue of $14.1 million was up 7% y-o-y.

Trading and clearing revenue of $89.6 million was down 11% y-o-y, while securities settlement and depository management revenue of $48.9 million was down 12% y-o-y. Treasury and other revenue of $3.5 million was down 5% from $3.7 million

Fixed Income, Currencies and Commodities (FICC)

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FICC revenue increased 35% y-o-y to $154.3 million and accounted for 27% of total revenue, up from 22% this time last year.

Fixed Income revenue decreased 35% y-o-y to $4.3 million. There were 449 bond listings with amounts issued of $104.3 billion, nearly half of the $209.4 billion seen this time last year.

Currencies and Commodities revenue increased 40% y-o-y to $150.0 million, accounting for 26% of total revenue.

OTC FX3 revenue was $36.2 million, of which MaxxTrader contributed $11.8 million.

Trading and clearing revenue was $108.7 million, up 29% y-o-y. Trading and clearing revenue grew mainly due to increased volumes in commodity and currency derivatives and higher contribution from OTC FX, says SGX Group.

Data, Connectivity and Indices

Finally, revenue from SGX Group’s Data, Connectivity and Indices segment dipped slightly at 1% y-o-y to $72.5 million, accounting for 13% of its total revenue.

Market data and indices revenue decreased by 8% to $38.0 million mainly due to lower revenue from SGX Group’s index business.

Connectivity revenue increased 9% to $34.5 million mainly due to an increase in subscription of SGX Group’s colocation services.

Loh Boon Chye, CEO of SGX Group, says: “We are pleased to deliver a set of financial results that underscores SGX Group’s relevance to global investors. Our derivatives business has continued to outperform with a 28% y-o-y increase in revenue, driven by broad-based gains across asset classes and record volumes in key contracts. Notably for commodities, we accelerated the financialisation of iron ore and expanded our service offering.”

Shares in SGX closed 1 cent lower, or 0.11% down, at $9.15 on Feb 8.

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