Third Quarter Financial Year 2013 - Singapore Exchange Reports $98Million
16 April 2013
Revenue: $191 million ($164 million in 3Q FY2012)
EBITDA: $126 million ($103 million) and Net Profit: $98 million ($78 million)
Earnings per share: 9.1 cents (7.3 cents)
Interim Dividend per share: 4.0 cents (4.0 cents)
All figures are for the quarter except for figures in brackets which are for the quarter a year earlier unless otherwise stated
SGX recorded revenue of $191 million ($164 million), net profit of $98 million ($78 million) and earnings per share (EPS) of 9.1 cents (7.3 cents). The Board of Directors has declared an interim dividend of 4.0 cents (4.0 cents) per share, payable on 2 May 2013.
Mr Magnus Bocker, SGX CEO, said, “We are reporting a net profit of $98 million, an increase of 26% from a year ago. A stronger market during the third quarter saw Securities daily average traded value of $1.7 billion, up 17% year-on-year. Our Derivatives market delivered a second consecutive record quarter with daily average traded volume of 479,235 contracts, up 52% year-on-year.”
Securities: Securities daily average traded value (SDAV) for the quarter was $1.7 billion, up 17% year-on-year ($1.5 billion) and up 41% quarter-on-quarter ($1.2 billion).
Derivatives: Derivatives daily average traded volume (DDAV) for the quarter was a record 479,235 contracts, up 52% year-on-year (315,919 contracts), and up 34% quarter-on-quarter (358,532 contracts). Several other records were also set this quarter, including monthly DDAV of 512,551 contracts in February and single-day Open Interest of 3.2 million contracts on 7 March 2013.
Issuer Services: Total equity funds raised were $2.4 billion, up from $484 million a year ago. Primary equity funds of $955 million ($36 million) were raised from five (two) Initial Public Offers (IPOs) and one Global Depository Receipts (GDR). Secondary equity funds of $1.5 billion were raised, up from $448 million a year earlier. There were 107 (105) new bond listings, raising $48.6 billion ($54.7 billion).
Market Development, Risk Management & Regulations
On 21 January 2013, we introduced margining for all securities cleared by the Central Depository. This initiative is in line with the new CPSS-IOSCO Principles for Financial Market Infrastructure and reinforces SGX’s standing as a central counterparty meeting the highest regulatory standards.
On 11 March 2013, we implemented new rules requiring investors to mark their short sell orders. This requirement enhances the transparency of SGX’s Securities market.
We have established a Working Committee to review the SGX listing manual to enhance the robustness, efficacy and relevance of the listing framework. The review dovetails with our initiatives to improve our Securities market and is part of continuing efforts to ensure that regulatory standards remain high. In its review, the Working Committee is also seeking proposals and suggestions from both professional and public market participants.
Improved sentiments across global capital markets this past quarter led to increased trading and clearing volumes for both our Securities and Derivatives markets. However global economic conditions remain volatile. It is uncertain if current market conditions will persist. Our IPO and bond listings pipelines are healthy. We are keeping up efforts to develop new products and services, and strengthen our regulatory and risk management capabilities. Expenses for FY2013 are expected to be between $295 million and $305 million. Capital expenditure is expected to be between $30 million and $35 million.
Net profit was $97.7 million ($77.8 million) and EBITDA $126.4 million ($102.8 million). Earnings per share (EPS) was 9.1 cents (7.3 cents).
Revenue was 17% higher at $190.6 million ($163.6 million), primarily due to a 26% increase in Derivatives revenue to $53.6 million ($42.5 million) and a 15% increase in Securities revenue to $74.9 million ($65.0 million).
Expenses were 7% higher at $75.2 million ($70.6 million) primarily due to increases in professional fees and other expenses. Professional fees were $4.2 million ($2.5 million) due to higher legal and consulting fees. Other expenses were higher at $4.7 million ($2.5 million) in the absence of one-off refunds received in the previous year.
Staff and Technology expenses were flat at $29.1 million ($29.0 million) and $25.7 million ($25.3 million) respectively.
Headcount as at 31 March 2013 was 585 (603).
Cashflow generated from operations was $115.9 million ($61.6 million). Capital expenditure was lower at $3.8 million ($7.7 million).
Total equity was higher at $798.6 million ($769.2 million) on 31 March 2013. The unrestricted cash reserves were $522.9 million ($505.8 million), from which the 3Q FY2013 interim dividend of $42.8 million ($42.7 million) will be paid on 2 May 2013.
Securities, 39% (40%) of SGX’s revenue
Securities revenue increased 15% to $74.9 million ($65.0 million), due to higher securities market activities. SDAV for the quarter was $1.71 billion, up 17% from the previous year ($1.46 billion), and 41% from the previous quarter ($1.21 billion).
The average clearing fee was up 4% to 2.9 basis points (2.8 basis points), due to an increase in the proportion of uncapped trades.
In March 2013, we signed a Memorandum of Understanding (MOU) with Philippine Dealing System Holdings Corp. (PDS) to develop fixed income access between Singapore and the Philippines.
Table below summarises the key metrics of our Securities market: