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Key messages
- Revenue and other income for 2016 was 17 per cent lower than 2015 or 14 per cent lower after excluding 2015 exceptional gains of $514 million. This compares favourably to the significantly reduced levels of market activity experienced during the year.
- Group revenue for the year was significantly influenced by the following factors:
- Subdued activity on the Cash Market in Hong Kong, which returned to pre-2015 levels;
- Decreased Commodities trading activity on the LME; and
- Increased trading of derivatives contracts on the Futures Exchange.
- Operating expenses increased by 5 per cent against the prior year or 3 per cent after eliminating a 2015 one-off recovery, of $77 million, from the liquidators of Lehman. Increased operating costs reflect the continued investment in strategic projects, which was substantially offset by expenditure control measures introduced during the year.
- The EBITDA margin of 69 per cent was 6 per cent lower than 2015, reflecting the decline of trading and clearing income as compared to the prior year.
- Profit attributable to shareholders decreased by 27 per cent against 2015 or 22 per cent after adjusting for the after tax effect of the 2015 exceptional gains and one-off recovery of $591 million. In 2015 record high trading volume on the Cash Market delivered exceptional profits for the Group. Notwithstanding the difficult trading conditions in 2016, profit attributable to shareholders compares well with pre-2015 results and was 12 per cent higher than 2014.
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