Singapore Exchange fiscal 4Q18 net profit slips amid higher expenses

A Singapore 10-dollar note Photo by Leslie Shaffer

Singapore Exchange reported on Friday that its fiscal fourth quarter net profit slipped 1.8 percent on-year to S$83.67 million as expenses and taxes rose.

Expenses rose 6.0 percent on-year to S$114.89 million in the quarter ended 30 June, from S$108.35 million in the year-earlier quarter, as staffing costs rose 7.7 percent to S$45.17 million, the stock exchange said in a filing to SGX after the market close on Friday. Its tax also rose 6.8 percent on-year in the quarter to S$18.20 million, it said.

Operating revenue rose 2.5 percent on-year in the quarter to S$212.95 million, from S$207.72 million in the year-earlier quarter, it said.

Singapore Exchange has proposed a final dividend of 15 Singapore cents a share, payable on 5 October, up 2 Singapore cents from the year-earlier period, bringing the total dividend for the year to 30 Singapore cents, up 2 Singapore cents from the previous year, it said, adding that would be the highest annual divided in 10 years.

For the full fiscal year, net profit increased 6.9 percent on-year to S$363.2 million, as operating revenue increased 5.5 percent on-year to S$844.68 million, it said.

Operating expenses for the year rose 5.2 percent on-year to S$419.78 million, it said.

‘Milestone’ results

SGX CEO Loh Boon Chye was upbeat on the full-year results.

“FY2018 was a record milestone in our financial performance as we achieved our highest revenue since listing in 2000 and the highest profit in five years,” Loh said in a press release. “All three core businesses registered higher revenues. Our securities daily average traded value (SDAV) hit a five-year high, with the number of bond listings and derivatives trading volumes reaching record highs.”

In its outlook statement, SGX said it would continue introducing new equities products and services, would improve its SGX Bond Pro, and would launch new derivative services such as its SGX FlexC FX futures and would enhance its Titan OTC Pro platform and expand its steel value chain.

It added that the FX derivatives business still had strong growth and was expected to contribute positively to net profit in the next few years. It also said it would aim to develop a digital marketplace in the global freight industry, building on the Baltic Exchange and its commodity franchise.

Trade tensions may offer boost

SGX also pointed to the possibility that the global trade tensions could benefit its bottom line.

“The prospect of escalating trade tensions and moderating global growth may result in higher market volatility, and in turn, greater demand for risk management solutions,” it said, pointing to its derivatives products.

For the next fiscal year, SGX estimated operating expenses of S$445 million to $455 million, and technology-related capital expenditure of S$60 million to S$65 million.

It also said it would revise its dividend policy to an absolute amount, from the previous policy of a percentage of net profit; it said it raised its base dividend to 7.5 Singapore cents a share per quarter, from 5 Singapore cents previously.


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