SGX second-half profit falls 20.5% to $205.6m on lower revenue

SINGAPORE (THE BUSINESS TIMES) – The Singapore Exchange (SGX) on Thursday (Aug 5) reported a 20.5 per cent decline in net profit for the second half on the back of lower operating revenue.

Net profit for the six months ended June 30 fell to $205.6 million, or 19.2 cents per share, down from $258.6 million, or 24.2 cents per share, in the prior-year period.

A final quarterly dividend of eight cents per share was proposed, similar to the year earlier. If approved, it brings total dividends in financial year 2021 to 32 cents, up from 30.5 cents last year.

The group’s operating revenue fell 6.8 per cent year on year during the second half to $535.1 million, with the decline coming from its equities segment.

However, operating revenue for the full year was slightly higher at $1.06 billion, up 0.3 per cent compared with FY2020. Even so, the SGX’s full-year net profit fell 5.6 per cent to $445.4 million.

The SGX said underlying business revenue was up 7 per cent, excluding the decline in treasury income, amid a low interest rate environment.

SGX chief executive Loh Boon Chye said: “We achieved a strong performance as we invested in growing our business, delivering similar record revenues compared to last year amidst a challenging environment.”

He added: “Notwithstanding the lower treasury income, our core business segments remained robust, with our fast-growing subsidiaries, Scientific Beta and BidFX, providing an added boost. While the low interest rate environment will continue to impact our treasury income, we believe it will also spur demand for our multi-asset offerings as investors seek enhanced returns.”

For the full year, the SGX’s largest business segment, equities, saw operating revenue decline 7.7 per cent to $701.1 million.

However, operating revenue grew under its Fixed Income, Currencies and Commodities (FICC) and Data, Connectivity and Indices (DCI) segments.

FICC revenue rose 23.5 per cent during the year to $211.8 million, accounting for a fifth of the group’s revenue. Excluding BidFX, a subsidiary acquired in July last year, FICC revenue would be comparable to the prior year, at $172.1 million.

Meanwhile, the DCI segment also saw revenue rise 17.7 per cent to $143.1 million, making up 14 per cent of the group’s total revenue. Excluding contributions from Scientific Beta, DCI revenue would have been $108.2 million, similar to FY2020.

SGX subsidiaries Scientific Beta and BidFX contributed 7 per cent to the group’s total revenues in FY2021. Last month, the company also announced the acquisition of FX trading platform MaxxTrader. Together with this, revenue contribution from recently acquired subsidiaries would exceed 9 per cent, the SGX said.

SGX shares rose 1 per cent, or 12 cents, to close at $12.05 on Wednesday.