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1H FY2022 Financial Summary
* Adjusted EBITDA, NPAT and EPS exclude certain non-cash and non-recurring items that have less bearing on SGX’s operating performance. Hence, they better reflect the group’s underlying performance. Adjusted figures are non-SFRS(I) measures. Please refer to Section 7 of our financial results for reconciliations between the adjusted and their equivalent measures.
All figures in the press release are for the year except for figures in brackets, which are for the year earlier, unless otherwise stated. Some figures may be subject to rounding.
Singapore Exchange (SGX) today reported 1H FY2022 adjusted net profit of S$221.8 million (S$228.0 million). Total revenue of S$521.6 million (S$520.8 million) was comparable to the same period last year.
Revenue from SGX’s underlying core businesses[1] rose 6% to S$501.0 million (S$472.6 million), with higher trading and clearing revenues from equity, currency and commodity derivatives. SGX’s fast-growing subsidiaries, BidFX and Scientific Beta, achieved collectively a 20% increase in revenues to S$40.4 million (S$33.8 million), accounting for 8% (7%) of SGX’s total revenue.
Adjusted EBITDA was S$309.6 million (S$321.2 million), while adjusted earnings per share stood at 20.7 cents (21.3 cents).
The Board of Directors has declared an interim quarterly dividend of 8.0 cents (8.0 cents) per share, payable on 21 February 2022. This brings the total dividends in 1H FY2022 to 16.0 cents (16.0 cents) per share.
Loh Boon Chye, Chief Executive Officer of SGX, said, “We are making good progress in executing our multi-asset strategy. Our underlying core revenue has grown, with strong performance in our currencies and commodities, healthy market share and yields for our key equity derivative products, as well as steady growth in our market data and index business. In the last two years, we have made S$1 billion worth of acquisitions and investments to leapfrog our multi-asset strategy and capture the growth opportunities across asset classes and platforms. One clear example is in currencies where we now have a sizeable FX OTC and futures business that can scale further as we integrate our newly-acquired subsidiary MaxxTrader and ramp up our FX Electronic Communication Network (ECN) in the coming months.”
During the period under review, total FX average daily volume (ADV) – comprising both on-exchange futures and OTC – increased 46% from US$39 billion to US$57 billion[2]. SGX’s FX ECN went live in November 2021 with successful trades completed across different currency pairs. The acquisition of FX platform MaxxTrader was completed in January 2022.
Looking ahead, Mr Loh added, “As Asian economies recover, demand for Asia-centric portfolio investment and risk management solutions will rise. China remains high on investors’ radar, which is expected to spur more activity for our range of China-access products. We will continue to broaden our securities and derivatives product shelf, enhance our global connectivity to facilitate new capital flows, and boost our digitalisation and sustainability efforts. On the capital raising front, we are seeing clear interest from potential issuers on the back of our new Special Purpose Acquisition Companies (SPACs) framework and joint interagency funding initiatives[3] for high-growth companies. Overall, we are optimistic of the opportunities ahead as an expanded SGX Group.”
Results Summary
Fixed Income, Currencies and Commodities (FICC)
FICC revenue – comprising Fixed Income as well as Currencies and Commodities – Derivatives revenues – increased 15% to S$114.0 million (S$99.2 million), accounting for 22% (19%) of total revenue.
Fixed Income revenue was comparable at S$6.6 million (S$6.7 million).
- Listing revenue: S$4.9 million, down 4% from S$5.1 million
- Corporate actions and other revenue: S$1.7 million, comparable
There were 492 (358) bond listings with amounts issued of S$209.4 billion (S$169.9 billion).
Currencies and Commodities – Derivatives revenue increased 16% to S$107.4 million (S$92.5 million), accounting for 21% (18%) of total revenue.
- Trading and clearing revenue: S$84.2 million, up 18% from S$71.4 million
- Treasury and other revenue: S$23.2 million, up 10% from S$21.1 million
Trading and clearing revenue grew mainly due to higher clearing revenue from BidFX and increased volumes in commodity and currency derivatives. Commodity derivatives volumes increased 17% to 14.1 million contracts (12.0 million contracts), while currency derivatives volume increased 6% to 12.6 million contracts (11.8 million contracts). Treasury and other revenue increased mainly due to higher revenue from platform services.
Equities
Equities revenue – comprising Equities – Cash as well as Equities – Derivatives revenues – declined 5% to S$334.5 million (S$350.8 million), accounting for 64% (67%) of total revenue.
Equities – Cash revenue decreased 5% to S$190.7 million (S$201.1 million), accounting for 37% (39%) of total revenue.
- Listing revenue: S$17.2 million, comparable
- Corporate actions and other revenue: S$13.2 million, down 10% from S$14.7 million
- Trading and clearing revenue: S$100.8 million, down 10% from S$111.5 million
- Securities settlement and depository management revenue: S$55.8 million, up 5% from S$53.1 million
- Treasury and other revenue: S$3.7 million, down 24% from S$4.8 million
There were 6 (5) new equity listings which raised S$1.3 billion (S$0.7 billion). Secondary equity funds raised were S$4.4 billion (S$6.5 billion).
Daily average traded value (DAV) and total traded value declined 8% and 7% to S$1.2 billion (S$1.3 billion) and S$150.4 billion (S$161.8 billion), respectively. This was made up of Cash Equities[4], where total traded value decreased by 7% to S$144.7 billion (S$156.3 billion), and Other Products[5], where traded value increased 4% to S$5.7 billion (S$5.5 billion). There were 129 (128) trading days in 1H FY2022.
Overall average clearing fees declined 4% to 2.60 basis points (2.71 basis points). Average clearing fees for Cash Equities decreased 4% to 2.66 basis points (2.77 basis points) due to higher participation from market makers. Average clearing fee for Other Products increased 10% to 1.09 basis points (0.99 basis points) due to increased activity from higher-yielding exchange-traded funds. Overall turnover velocity for 1H FY2022 was 39% (49%).
Securities settlement and depository management revenue increased mainly due to higher Delivery-versus-Payment guarantee fees.
Equities – Derivatives revenue dipped 4% to S$143.8 million (S$149.7 million), accounting for 28% (29%) of total revenue.
- Trading and clearing revenue: S$131.3 million, up 19% from S$110.6 million
- Treasury and other revenue: S$12.5 million, down 68% from S$39.1 million
Trading and clearing revenue increased mainly due to higher average fees from SGX FTSE China A50, Nifty 50 and FTSE Taiwan Index futures.
Treasury and other revenue decreased mainly from lower treasury income, which declined primarily due to lower yield.
Average fee per contract for Equity, Currency and Commodity derivatives was higher at S$1.50 (S$1.27) mainly due to higher fees for the SGX FTSE China A50 Index futures and the absence of introductory fees for the FTSE Asia expansion suite implemented a year ago.
Data, Connectivity and Indices
Data, Connectivity and Indices revenue increased 3% to S$73.1 million (S$70.7 million), accounting for 14% (14%) of total revenue.
- Market data and Indices revenue: S$41.4 million, up 5% from S$39.6 million
- Connectivity revenue: S$31.8 million, up 2% from S$31.2 million
Market data and indices revenue increased 5% mainly due to higher revenue from Scientific Beta and an increase in data subscription.
Adjusted total expenses increased 4% to S$252.1 million (S$242.1 million), which exclude amortisation of purchased intangibles, acquisition-related expenses and other one-off items.
Operating expenses increased 8% to S$215.6 million (S$199.3 million) mainly from higher staff costs and technology expenses. Average headcount for the half-year was 980 (968), including 139 (120) staff from Scientific Beta and BidFX.
Depreciation and amortisation decreased 5% to S$46.5 million (S$49.0 million) mainly due to fully depreciated system-related assets. This was partially offset by an increase in depreciation relating to BidFX.
Total capital expenditure was S$16.5 million (S$19.8 million). These investments were mainly for upgrades to SGX’s Titan OTC trade reporting system, and the setup of infrastructure for BidFX and the NSE-SGX Gujarat International Finance Tec-City (GIFT) Connect.
With effective management of expenses amidst inflationary pressures, total expenses for FY2022 will be kept between S$565 million and S$575 million, even with the inclusion of expenses relating to MaxxTrader.
SGX’s capital expenditure guidance for FY2022 remains unchanged at between S$60 million and S$65 million.
-End-
Financial Highlights
Note: SGX’s financial year is from 1 July to 30 June. Some numbers may be subject to rounding.
NM: Not meaningful
[1] Excluding treasury income
[2] Excluding ADV of MaxxTrader and FX Electronic Communication Network
[3] In September 2021, Singapore announced a package of initiatives to support high-growth enterprises to raise capital in Singapore’s public equity market (https://www.sgx.com/media-centre/20210917-boosting-equity-financing-high-growth-enterprises)
[4] Cash Equities include ordinary shares, real-estate investment trusts and business trusts
[5] Other Products include structured warrants, exchange-traded funds, daily leverage certificates, debt securities and American depository receipts
