SGX net profit up 7.7% to 11-year high of $391.1m in 2019

The revenue of its derivatives business soared 35% as contract volumes grew.

The Singapore Exchange’s (SGX) net profit shot up 7.7% YoY to $391.1m in 2019 from $363.2m in the same period last year, marking its highest net profit in 11 years, its financial statement revealed.

Operating revenue was also up by 7.7% to $909.81m, whilst operating expenses grew 6.9% to $448.79m from $419.79m.

SGX mainly attributed the growth of its profits to its derivatives business. Derivatives revenue soared 35% to $459.7m, and accounted for 51% of total revenue. Equity and commodities revenue grew 23% to $292.1m, whilst revenue from collateral management, licence, membership and other revenue rose 63% to $167.7m.

Equity and commodities total volumes increased 21% to 240.3 million contracts, driven by growth in its SGX FTSE China A50, MSCI Taiwan, and iron ore derivatives contracts. Volumes in FX and MSCI net total return derivatives also saw significant increases.

Average fee per contract was higher at $1.09 from $1.06 last year mainly due to an increase in the number of full fee-paying customers.

Meanwhile, equities & fixed income revenue dipped 15% to $347.5m and accounted for 38% of total revenue.

Issuer services revenue decreased 7% to $79.7m, accounting for 9% (10%) of total revenue. Listing revenue fell 11% to $45.8m, whilst revenue from corporate actions and others dipped 2% to $34m.

Securities trading and clearing revenue decreased 18% to $182.1m and accounted for 20% of total revenue. Access revenue fell 16% to $34.3m, whilst revenue for collateral management, membership and others dipped 6% to $9m.

Securities daily average traded value (SDAV) decreased 17% to $1.04b from $1.26b. Total traded value decreased 17% to $259.5b from $314b. This was made up of equities, where traded value declined by 17% to $241.4b, and other products, where traded value sharply fell by 20% to $18.1b.

Post trade services revenue declined 14% to $85.7m and accounted for 9% of total revenue. Meanwhile, market data and connectivity revenue grew 4% to $102.5m, accounting for 11% of total revenue.

SGX’s expenses rose 7% to $448.8m mainly due to higher staff costs driven by the expansion of technology capabilities and international presence. Total staff costs increased 9% to $191.4m.

Fixed staff costs increased 10% to $129.5m mainly due to an increase in headcount and annual staff salary increments, whilst provisions for variable staff costs increased 6% to $62.0m in line with higher profits.

SGX’s average headcount for the year was 820, higher than 792 last year.

The board has proposed a final dividend of 7.5 cents per share, payable on 18 October 2019.