THE Singapore Exchange (SGX) on Thursday (Feb 6) posted a net profit of S$340 million for the first half ended December, up 20.7 per cent from S$281.6 million in the previous corresponding period.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) for H1 grew 23.4 per cent on the year to S$425.3 million.
Earnings per share (EPS) stood at S$0.318, up from S$0.263 in the year-ago period.
After adjusting for certain “non-cash and non-recurring items” that have less bearing on SGX’s operating performance, its net profit would have risen 27.3 per cent to S$320.1 million, and its EPS would have been S$0.299.
SGX’s board of directors has declared an interim quarterly dividend of S$0.09 per share, up from the S$0.085-per-share payout in the previous corresponding period. This brings total dividends in H1 FY2025 to S$0.18 per share.
The interim quarterly dividend will be paid on Feb 21.
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Revenue for the half-year period increased 15.2 per cent to S$682.2 million, from S$592.2 million in the previous corresponding period.
Excluding transaction-based expenses such as processing and royalty fees, net revenue would have risen 15.6 per cent to S$646.4 million, from S$559 million in the year-ago period.
“Starting from this financial year, we have implemented net revenue reporting to better reflect the underlying economics of our business,” said Daniel Koh, newly appointed chief financial officer of SGX Group, at the financial results briefing on Thursday.
“Both our half-year operating revenue and earnings have reached the highest levels,” he added.
SGX attributed the increase in its top and bottom lines to growth across all its business segments.
Loh Boon Chye, chief executive officer of the group, noted that the cash equities and equity derivatives segments led SGX’s broad-based performance.
This was followed by the currencies and commodities business unit, with “notable growth in our over-the-counter foreign exchange business now contributing 5 per cent of the group’s Ebitda”, he said.
At the briefing, Koh highlighted that the securities daily average traded value increased 31.2 per cent to S$1.3 billion, “driven by strong investment flows into the index stocks and real estate investment trusts on the back of rate cuts, robust market fundamentals and other macro factors”.
By segments
The fixed income, currencies and commodities (FICC) segment registered a 13.4 per cent increase in net revenue to S$159.1 million, representing 24.6 per cent of the total net revenue for H1.
Specifically, fixed income net revenue was up 22.8 per cent at S$4.8 million. This consisted of S$3.2 million in listing revenue, which rose 24.6 per cent from the year-ago period, and S$1.6 million from corporate actions and other revenue, which gained 17.7 per cent.
“There were 395 bond listings raising S$145.6 billion, compared to 489 bond listings raising S$131.7 billion a year earlier,” the bourse operator noted.
Currencies and commodities under FICC logged a 13.1 per cent increase in net revenue to S$154.3 million.
Koh attributed this growth to “proactive steps” taken by SGX in broadening client participation amid higher global market volatility.
Net revenue from cash equities, which made up 29.8 per cent of total net revenue, was up 22.3 per cent at S$192.6 million.
“Our cash equities business grew significantly, driven by elevated investor interest,” added Koh.
Net revenue from derivatives equities, which accounted for 27.4 per cent of total net revenue, rose 21.6 per cent to S$177.4 million.
“We recorded five new equity listings which raised S$19.7 million. Secondary equity funds raised were S$3.1 billion,” said SGX.
Platform and others’ net revenue, accounting for 18.1 per cent of total net revenue, increased 1.7 per cent to S$117.3 million.
Total expenses, excluding transaction-based costs, were S$263.1 million, up from S$262.8 million previously. This came mainly from higher variable staff costs, offset by lower depreciation and amortisation, as well as fixed staff costs.
Outlook
Looking ahead, SGX expects some moderation of macro tailwinds in the near term, as the impact from the US elections and China stimulus measure announcements taper off.
Loh said: “The breadth and depth of our multi-asset offering and ecosystem, coupled with an expanded product suite and customer base, positioned us well to capture market opportunities.”
He added: “We are focused on growing our business and remain optimistic about our medium-term outlook.”
The bourse operator noted that it is expanding its product suite, including new depository receipts and exchange-traded funds. It also pointed out that it is seeing improvement in its initial public offering pipeline.
“We expect our expenses and capital expenditure to be at the lower end of our FY2025 guidance, previously guided at 2 to 4 per cent increase, and between S$70 million and S$75 million, respectively,” it said.
Shares of SGX rose 1.2 per cent or S$0.15 to S$12.58 as at 11.08 am on Thursday, after its results announcement.
