SINGAPORE (Oct 24): Following a realignment of its organisational structure and businesses in July, the Singapore Exchange reported a positive set of results ended 1Q19 ended Sept 30.
The bourse operator’s earnings leapt 25% y-o-y to $114.2 million from $91.1 million – the highest quarterly earnings in more than 10 years.
Its revenue jumped 19% to $247.6 million from $208.9 million in the same quarter last year, but remained flat compared to the preceding quarter.
SGX declared an interim dividend of 7.5 cents a share, payable on Nov 11.
Under the revamp, SGX now has four business units in the aim of capitalising on its strength as an international multi-asset exchange.
However, for reporting purposes, there are only three business units.
Under the fixed income, currencies and commodities (FICC) business, revenue more than doubled to $45.8 million from $29.1 million a year ago. This accounted for 19% of total revenue.
The higher revenue came on the back of improved revenue contribution from fixed income, and currency and commodity futures.
The equities business, which comprised 71% of total revenue, registered higher revenue of $176.1 million, up 14% y-o-y, from $155 million.
This came on the back of higher revenue contribution from both cash and derivative equities.
Finally, the data, connectivity and indices business recorded higher revenue of $25.7 million, up 4% y-o-y, from $24.7 million. This accounted for 10% of total revenue.
SGX saw higher derivatives connectivity subscriptions and continued growth of its colocation services business.
“The growth across our three business segments is largely due to our broad-based efforts in expanding our global client base and ensuring we meet clients’ risk management and capital efficiency needs,” SGX CEO Loh Boon Chye says in statement.
Meanwhile, SGX on Oct 17 announced that it established a $1.5 billion multi-currency debt issuance programme, giving it additional funding for potential investments and for general working capitals.
It will be the exchange’s first fund-raising since its IPO in 2000 – if and when SGX draws from this programme.
As at Sept 30, SGX was debt free, giving it a net cash position of $551.5 million. This is excluding its cash commitments for the securities and derivatives clearings funds, as well as the National Electricity Market of Singapore.
Asked why SGX is potentially raising debt from the market when it has positive cashflow, Loh says the programme provides “flexibility” to pursue growth.
“As you pointed out we generate good cash flow from our businesses. We are unleveraged at this point in time. We’d like to more actively manage our balance sheet,” he says at the company’s results briefing on Thursday evening.
Loh adds that SGX will make the relevant announcements as and when it issues the securities.
Shares in SGX closed 3 cents higher at $8.28 on Thursday, before the results announcement.
