Singapore Exchange (S68) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 3.1% to SGD 1.23 billion, with adjusted net profit up 4.5% to SGD 526 million, driven by strong growth in currencies and commodities, while equities segments declined.

• The multi-asset strategy diversified revenue, with FICC, equities, and derivatives each contributing about a quarter, and platforms/other businesses making up 20%.

• Adjusted operating profit margin was 50.7%, and adjusted NPAT margin was 42.1%.

• The group remains focused on expanding its FX and commodities franchises, enhancing product offerings, and deepening regional and global connectivity.

• Board proposed a final quarterly dividend of 9.0 cents per share, up 5.9% year-over-year.

Financial highlights

• Derivatives revenue grew 2% to comprise 45% of total revenue, with 8% volume growth; currency futures DAV up 35%, commodities DAV up 50%, and OTC FX ADV up 47% to $111 billion.

• Commodities volumes surged 50.2% to 61.5M contracts, mainly due to iron ore derivatives.

• Cash equity market activity remained subdued, with SDAV down 4% year-on-year and cash market revenue down 2%.

• Adjusted expenses rose 2.5% to SGD 604 million, mainly from higher staff and technology costs.

• Net fair value gain of over SGD 100 million from revaluation of investment in Trading Technologies.

Outlook and guidance

• Group targets 6%-8% CAGR in revenue (excluding treasury income) over the medium term, led by low- to mid-teens % growth in OTC FX and exchange-traded derivatives.

• Expense growth expected at 2%-4% in FY2025, with medium-term organic expense growth in the low- to mid-single-digit % range.

• CapEx guided at SGD 70-75 million for FY2025, focused on modernization and infrastructure upgrades.

• Scientific Beta underperformance may lead to strategic repositioning and potential goodwill impairment.

• Dividend per share increased to SGD 0.345 for FY2024, with a stated aim for mid-single-digit % growth in the medium term.