SFE Corporation Limited Announces 2001 Half-Year Profit And Financial Outlook For Remainder Of 2001

SFE Corporation Limited today released its financial results for the half-year ended 30 June 2001. The full financial results for the period are attached to this release. The highlights include:

• Net profit after tax was $11.8 million, including a non-recurring revenue item of $0.7 million after tax relating to the sale of software by Austraclear prior to its merger with SFE on 18 December 2000. The net figure of $11.1m for the 6 months to 30 June 2001 compares favourably with the full year NPAT to 31 December 2000 of $11.5m (before abnormals) and $4.8m for the same period last year.
• Due to the structural increase in tax expense associated with the group's demutualised status, the net profit before tax of $17.7m compared to $6.1m in the six months to June 2000, is a more meaningful prior year comparison.
• Revenue for the six months to 30 June 2001 was $45.0m, compared to $33.5m for the same period last year. $10.1m of the increase are revenues associated with the Austraclear purchase of December 2000. Expenses increased by modest $0.8m (3%) compared to the prior half year as a result of cost initiatives undertaken since demutualisation.
• The Board has declared an interim dividend of 4.3 cents per share, fully franked, representing 50% of the underlying NPAT attributable to SFE shareholders.

In releasing the results, SFE's Managing Director and CEO, Robert Elstone, said: "SFE's solid half-year performance was in line with corporate objectives, and reflected the company's improved operational efficiencies combined with exchange traded volume growth."

"Volumes in our benchmark contracts continued to be strong in the first half, assisted by market volatility following three consecutive rate cuts by the RBA. Importantly," continued Mr. Elstone, "this half yearly result was achieved at the same time as materially reducing average exchange contract fees."

"The half-year to June was also a period of further consolidation for the SFE, as the Austraclear business was integrated, and staff and premises brought together. That part of the integration process is now complete and the associated cost savings, service and operational efficiencies have now been realised. The merger between SFE and Austraclear also presents a range of new product and service opportunities, a number of which will be introduced in the second half of 2001."

Despite the strong performance, Mr. Elstone did caution against annualising the half-year result. "The historical trend for the exchange is for lower trading volumes in the second half of the year, (on average to be 6% lower). In addition we expect technology costs to rise with the implementation of new clearing technology initiatives."