Overview of FY2003 full year financial performance
SGX recorded S$66.0m net profit after tax and minority interests before a writedown of properties, and a net profit after tax and minority interests of S$16.0m after the writedown. This total write-down of S$50.0m for properties comprises S$45.0m for SGX Centre and S$5.0m for 18 New Industrial Road. It reflects a 21% drop in the value of both properties.
Total operating profit, excluding a S$3.0m and S$7.0m provision for surplus leased premises for the current and previous financial years respectively, was S$9.1m lower at S$55.1m, compared to S$64.2m last financial year. SGX Group recorded total operating revenue of S$218.5m, compared to S$228.7m for the previous financial year. This decrease was attributed to a decrease in securities clearing fees, and account maintenance and processing fees, partly offset by an increase in derivatives clearing fees and related income. Total operating expenses decreased 0.7% to S$163.4m from S$164.5m. This excludes the impact of S$3.0m and S$7.0m provision for surplus leased premises for the current and previous financial years respectively. Furthermore, if total operating costs of Asia Converge Pte Ltd and non-recurring costs were excluded, total operating costs would have decreased by 8.3% to S$141.1m from S$153.8m. SGX Group FY2003 fourth quarter financial performance In the fourth quarter of FY2003, operating profit amounted to S$18.0 million, compared to S$13.2 million for the previous corresponding quarter. This excludes the impact of S$3.0 million provision for surplus leased premises for the current quarter. SGX Group generated operating revenue of S$63.8 million for 4Q FY2003, compared to S$60.0 million for 4Q FY2002. The 6.3% increase was mainly due to the increase in revenue from both Securities and Derivatives Markets. In the securities market, trading value increased 19.1% to S$34.5 billion in 4Q FY2003 from S$28.9 billion in 4Q FY2002. Trading volume increased 72.9% to 48.1 billion shares from 27.8 billion shares between the same periods. As a result, securities clearing fee increased 12.7% to S$21.9 million in 4Q FY2003 from S$19.4 million in 4Q FY2002. New listings increased to 15 in 4Q FY2003 from 4 in 4Q FY2002.
In the derivatives market, derivatives clearing fees and related income increased 14.9% to S$11.7 million in 4Q FY2003 from S$10.2 million for 4Q FY2002. Trading volume increased 14.9% to 9.6 million contracts in 4Q FY2003 from 8.3 million contracts in 4Q FY2002.
Proposed final and special dividend
SGX declared a final gross dividend of 3.5 cents per share. In March 2003, an interim gross dividend of 3.0 cents per share was paid for the half year ended December 2002. The final dividend brings the full year gross dividend to 6.5 cents per share. SGX proposed that it will return an aggregate of S$266.0 million to shareholders via a special gross dividend of 34.0 cents per share. Subject to shareholders' approval at the Annual General Meeting and Extraordinary General Meeting on 22 October 2003, both the final dividend and special dividend will be paid on 12 November 2003.
SGX CEO, Mr Hsieh Fu Hua, commented, "SGX has come through a difficult year. I am encouraged by our resilient performance despite the challenging conditions. The strong operating performance in the fourth quarter and the recent turnaround in market activity augurs well for SGX."
"At the time of our listing in November 2000, we told shareholders and investors that we will review the options on the use of the excess cash if we do not find a suitable use for it within three years. To make good on that promise, and in line with the disciplined approach we have adopted in running the business, we have proposed returning the cash to shareholders through a special dividend."
He added, "Going forward, we will defend and grow our core business of operating a securities and derivatives market. Our priority is to build a strong and passionate team to deliver what the customers need, and in turn create value for shareholders in the long term."
Financial Highlights of FY2003 Audited Full Year Results - 1 July 2002 to 30 June 2003
| S$m | FY2003 | FY2002 |
| Operating revenue | 218.5 | 228.7 |
| Operating expenses | (166.4) | (171.5) |
| Operating profit | 52.1 | 57.2 |
| Non-operating revenue | 25.4 | 19.9 |
| Exceptional item | (50.0) | - |
| Profit before tax and minority interests | 27.5 | 77.1 |
| Share of results of joint venture | (0.1) | (0.1) |
| S$m | FY2003 | FY2002 |
| Tax | (14.6) | (18.7) |
| Minority interests | 3.2 | 2.6 |
| Net profit attributable to shareholders | 16.0 | 60.9 |
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