Singapore Exchange : Second Half FY2023 Results SGX Group Financial Results

Financial Results

For the Financial Year Ended

30 June 2023

Singapore Exchange Limited

Incorporated in the Republic of Singapore

Company Registration Number: 199904940D

SINGAPORE EXCHANGE LIMITED

Financial Results for the Financial Year Ended 30 June 2023

Section	Content	Page
1.	Performance Summary	2
2.	Income Statement ‐ Group	9
3.	Statement of Comprehensive Income ‐ Group	10
4.	Detailed Notes on Revenue ‐ Group	11
5.	Detailed Notes on Expenses ‐ Group	12
6.	Earnings Per Share ‐ Group	12
7.	Half Yearly Income Statement ‐ Group	13
8.	Adjusted Financial Measures ‐ Group	15
9.	Statement of Financial Position ‐ Group	16
10.	Net Asset Value ‐ Group	17
11.	Borrowings and Debt Securities ‐ Group	17
12.	Statement of Cash Flows ‐ Group	18
13.	Statement of Changes in Equity ‐ Group	19
14.	Segment Information ‐ Group	21
15.	Statement of Financial Position ‐ Company	22
16.	Net Asset Value ‐ Company	22
17.	Statement of Changes in Equity ‐ Company	23
18.	Bank Facilities, Contingent Liabilities and Commitments ‐ Group	25
19.	Dividend ‐ Company	25
20.	Share Capital ‐ Company	26
21.	Accounting Policies ‐ Group	27
22.	Other Listing Manual Requirements	27

The full year financial results set out in Sections 2 to 6, 9, 11 to 15, 17, 18 and 20 to 21 of this announcement have been extracted from the audited financial statements for the full year ended 30 June 2023. The audited financial statements of the Company and its subsidiaries for the full year ended 30 June 2023 is attached to this announcement.

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1. Performance Summary

Financial Overview

	FY2023	FY2023 Adjusted*
Revenue	$1,194.4 million, up 8.7%
EBITDA	$687.9 million, up 8.5%	$688.6 million, up 8.0%
Net profit attributable to equity holders of the	$570.9 million, up 26.5%	$503.2 million, up 10.3%
Company (NPAT)
Earnings per share (EPS)	53.4 cents	47.1 cents
Proposed final quarterly dividend per share	8.5 cents, up 0.5 cents

• 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 8 of our financial results for reconciliations between the adjusted and their equivalent measures.

All figures are for the year except for figures in brackets, which are for the year earlier unless otherwise stated. Figures may be subject to rounding.

SGX recorded EBITDA of $687.9 million ($634.1 million) and net profit attributable to SGX of $570.9 million ($451.4 million) in FY2023. Earnings per share was 53.4 cents (42.2 cents). Adjusted EBITDA was $688.6 million ($637.8 million) and adjusted net profit was $503.2 million ($456.4 million). Adjusted earnings per share was 47.1 cents (42.7 cents).

The Board of Directors has proposed a final quarterly dividend of 8.5 cents (8.0 cents) per share, payable on 20 October 2023, for approval at the forthcoming annual general meeting. If approved, this brings total dividends in FY2023 to 32.5 cents (32.0 cents) per share. Barring unforeseen circumstances, the annualised dividend will be 34.0 cents per share, an increase of 6.3%.

Business and Expenses Overview

Revenue increased $95.4 million or 8.7% to $1,194.4 million ($1,099.0 million), mainly driven by derivatives1 which increased $115.6 million or 27.2%.

Fixed Income, Currencies and Commodities Business (FICC)

FICC revenue increased $85.4 million or 33.8% to $338.2 million ($252.7 million) and accounted for 28.3% (23.0%) of total revenue.

FICC - Fixed Income

Fixed Income revenue decreased $3.9 million or 31.8% to $8.3 million ($12.2 million).

• Listing revenue: $5.1 million, down 41.2% from $8.7 million
• Corporate actions and other revenue: $3.2 million, down 8.0% from $3.5 million

There were 918 bond listings raising $243.4 billion, compared to 1,179 bond listings raising $429.6 billion a year earlier.

1 Derivatives revenue includes Equities Derivatives, Currencies and Commodities futures and options trading and clearing revenue and associated treasury income. Total treasury income grew by $88.9 million.

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FICC - Currencies and Commodities

Currencies and Commodities revenue increased $89.3 million or 37.1% to $329.9 million ($240.6 million) and accounted for 27.6% (21.9%) of total revenue. OTC FX2 revenue increased $$17.1 million or 29.2% to $75.4 million ($58.4 million).

• Trading and clearing revenue: $227.1 million, up 23.5% from $183.9 million
• Treasury and other revenue: $102.8 million, up 81.3% from $56.7 million

Trading and clearing revenue grew $43.2 million, mainly due to increased volumes in commodity and currency derivatives, primarily from iron ore futures and USD/CNH FX futures; as well as higher contribution from OTC FX.

Commodity derivatives volumes increased 35.4% to 41.0 million contracts (30.3 million contracts), while currency derivatives volume increased 28.7% to 36.7 million contracts (28.5 million contracts). OTC FX average daily volume (ADV) increased 7.3% to US$75.8 billion (US$70.6 billion).

The increase in Treasury and other revenue was driven mainly by higher treasury income and the full-year consolidation of MaxxTrader.

Table 1: Currencies and Commodities Volumes ('000)
	FY2023	FY2022	Change
Currency derivatives	36,654	28,487	28.7%
Iron Ore derivatives	35,983	25,553	40.8%
Freight derivatives	2,039	1,924	6.0%
Rubber derivatives	2,117	1,720	23.1%
Others	1,476	1,607	-8.1%
Total	78,269	59,290	32.0%

Equities Business

Equities revenue increased $10.3 million or 1.5% to $709.2 million ($698.9 million) and accounted for 59.4% (63.6%) of total revenue.

Equities - Cash

Equities - Cash revenue decreased $42.3 million or 10.9% to $346.1 million ($388.4 million) and accounted for 29.0% (35.3%) of total revenue.

• Listing revenue: $30.9 million, down 11.0% from $34.8 million
• Trading and clearing revenue: $175.4 million, down 16.4% from $209.7 million
• Securities settlement, depository management, corporate action, treasury and others3: $139.8 million, down 2.9% from $144.0 million

There were 8 new equity listings compared to 17 new equity listings a year before, raising $37.6 million compared to $1.9 billion a year ago. Secondary equity funds raised were $4.8 billion ($5.7 billion).

Daily average traded value (DAV) declined 13.4% to $1.1 billion ($1.3 billion) and total traded value declined 14.1% to $275.5 billion ($320.8 billion). This was made up of Cash Equities4, where traded value decreased by 14.5% to $263.2

1. OTC FX comprise BidFX, MaxxTrader and SGX CurrencyNode in 2H FY2022 and FY2023, but only BidFX and SGX CurrencyNode for 1H FY2022, as MaxxTrader was acquired in January 2022.
2. Includes DVP guarantee fees and membership fees.
3. Cash Equities include ordinary shares, real-estate investment trusts and business trusts.

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billion ($308.0 billion), and Other Products5, where traded value decreased 4.1% to $12.2 billion ($12.7 billion). There were 250 (252) trading days in the year.

Overall average clearing fees for equities declined 0.07 basis points to 2.49 basis points (2.56 basis points). Average clearing fees for Cash Equities declined 0.05 basis points to 2.57 basis points (2.62 basis points) due to higher participation from active traders and market makers. Average clearing fee for Other Products declined 0.21 basis points to 0.78 basis points (0.99 basis points) due to a change in product mix. Overall turnover velocity for FY2023 was 37.0% (42.0%).

The decline in securities settlement, depository management, treasury and other revenue was mainly due to lower settlement instructions volume.

Table 2: Key Metrics for Cash Equities Market
	FY2023	FY2022	Change
Total traded value ($ billion)	275.5	320.8	-14.1%
Period-end total market capitalisation ($ billion)	811.7	865.4	-6.2%
· Primary-listed	635.2	639.0	-0.6%
· Secondary-listed	176.5	226.4	-22.0%
Turnover velocity (primary-listed)	37.0%	42.0%	-11.9%
Total traded volume (in billion)	350.3	388.2	-9.8%

Equities - Derivatives

Equities - Derivatives revenue increased $52.6 million or 17.0% to $363.1 million ($310.4 million) and accounted for 30.4% (28.2%) of total revenue.

• Trading and clearing revenue: Comparable at $281.6 million
• Treasury and other revenue: $81.5 million, up from $28.6 million

Trading and clearing revenue was impacted by a decline in trading volumes, partially offset by higher average fees in key equity derivatives contracts.

The increase in Treasury and other revenue was driven mainly by higher treasury income.

Table 3: Equity Derivatives Volumes ('000)
	FY2023	FY2022	Change
FTSE China A50 Index futures	93,106	104,600	-11.0%
Nifty 50 Index futures6 and options	27,308	28,423	-3.9%
FTSE Taiwan Index futures	16,483	17,494	-5.8%
Japan Nikkei 225 Index futures and options	16,782	19,965	-15.9%
MSCI Singapore Index futures	14,322	13,812	3.7%
Single Stock futures	2,770	2,830	-2.1%
FTSE Net Total Return derivatives	814	773	5.2%
FTSE Indonesia Index futures	212	202	4.6%
Others7	897	849	5.7%
Total	172,693	188,949	-8.6%

1. Other Products include structured warrants, exchange-traded funds, daily leverage certificates, debt securities and depository receipts
2. Includes NSE IFSC Nifty 50 Index Futures for FY2023
3. Others comprise mainly FTSE China H50 and FTSE Vietnam 30 Index Futures

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