Singapore Exchange (SGX Group) has reported $525.9 million in adjusted net profit for FY2024 ended June 30, 4.5% higher from the previous year. Adjusted ebitda was up 3.3% y-o-y to $711.6 million, while adjusted earnings per share (EPS) was 49.2 cents, up from 47.1 cents this time last year.
Adjusted ebitda, net profit and EPS exclude certain non-cash and non-recurring items that have less bearing on SGX Group’s operating performance, according to an Aug 8 announcement. Hence, they better reflect the group’s underlying performance.
Without the adjustment, ebitda would have only risen 2.1% y-o-y and net profit would have seen higher growth, at 4.7% y-o-y. Full-year revenue grew 3.1% y-o-y to $1.23 billion.
SGX has proposed a final quarterly dividend of 9.0 cents per share, up from 8.5 cents per share in the prior year. SGX last raised its quarterly dividend at the end of FY2023 after 12 consecutive quarters of paying 8 cents per share.
The final dividend is payable on Oct 25, for approval at the forthcoming annual general meeting. If approved, this represents an annualised increase of 5.9%.
SGX’s fixed income, currencies and commodities (FICC) segment has delivered more than 20% CAGR in the last three years.
See also: After 12 quarters, SGX raises quarterly dividend for FY2023
There were 1,015 bond listings raising $296.3 billion in FY2024, compared to 918 bond listings raising $243.4 billion a year earlier.
Commodities daily average volume (DAV) grew 50% to about 240,000 contracts in FY2024, driven mainly by broadening participation in iron ore futures contracts during the overnight T+1 session. “Looking ahead, the next phase of growth for commodities will be anchored on synergies between our ferrous and freight offering,” says the bourse.
OTC FX average daily volume well surpassed SGX’s target with a 47% increase to reach US$111 billion ($147.27 billion) in FY2024, while currency futures DAV grew 36% to about 204,000 contracts.
See also: SGX enjoys FX, iron ore derivatives boost in 1HFY2024; insists spac rules 'work'
SGX’s OTC FX business is projected to contribute mid-to-high single digit percent of group ebitda in the medium term, compared to around 3% in FY2024.
During FY2024, SGX recorded seven new equity listings, which raised $117.0 million, down from eight new listings that raised $37.6 million in FY2023. Secondary equity funds raised were $1.2 billion in FY2024, down from $4.8 billion in FY2023.
Total expenses increased 3.4% y-o-y to $625.3 million in FY2024, mainly from higher staff costs and “one-time provision to fund initiatives targeted at improving the vibrancy of the securities market”. This was offset by lower processing and royalties and professional fees.
Adjusted total expenses increased 2.5% to $604.0 million, excluding the one-time provision, amortisation of purchased intangible assets, and others.
In the medium term, SGX aims to grow group revenue (excluding treasury income) between 6% to 8% CAGR. This will be driven mainly by low- to mid-teens percentage growth in OTC FX and exchange-traded derivatives businesses.
SGX expects FY2025 expenses to grow 2% to 4% y-o-y. This will be achieved by measured pace of headcount growth, improving operational efficiency and realising savings from the completion of the migration of the OTC FX data centre.
Total capital expenditure in FY2024 was $66.0 million, up from $59.4 million in FY2023. These investments include modernisation of SGX’s technology infrastructure and consolidation of office spaces.
See also: MAS launches review group to strengthen equities market; recommendations to come within a year
FY2025 capital expenditure is expected to be $70 million to $75 million as SGX invests in modernising its securities system and upgrading infrastructure. Beyond FY2025, capital expenditure is expected to further increase due to continued investments into the modernisation of exchange trading and clearing platforms, and data centre costs.
Over the next cycle, capital expenditure is anticipated to remain below the historical average of 7% of group revenue, says SGX. “We expect to achieve positive operating leverage as group expense growth is expected to be in the low to mid-single digit percentage CAGR in the medium term.”
SGX Group CEO Loh Boon Chye says their multi-asset strategy has yielded positive results over the years and “will remain our core differentiator”. “Revenue growth in FY2024 was led by strong volumes in our currencies and commodities businesses as we expanded our customer base and drove higher activity. Our currencies and commodities franchises are on a healthy growth momentum with volumes doubling over the last three years. Our equities businesses showed stronger activity in 2HFY2024, with equity derivatives daily average volume and securities daily average value increasing 11% and 21% h-o-h respectively.”
According to Loh, SGX is “pushing ahead with efforts to increase market participation, product development and adoption, as well as cross-border connectivity”. “At the same time, we will work closely with the review group set up by the Monetary Authority of Singapore (MAS) to recommend measures to strengthen equities market development in Singapore.”
A new review group comprising 10 leaders from the public and private sectors will recommend measures to strengthen Singapore’s equities market within a year, announced group chair Chee Hong Tat, Minister for Transport, Second Minister for Finance and MAS board member.
Shares in SGX closed 30 cents higher, or 3.16% up, at $9.79 on Aug 8.
