KEY POINTS:
Exchange operator NZX Group has lifted first half net profit 18 per cent to $4.97 million.
Chief executive Mark Weldon said the result reflected the company's strategy of structuring NZX business lines to minimise the impact of negative cyclical market conditions.
The result for the six months to the end of June compared with $4.21m in the corresponding period last year and was made on operating revenue up 6 per cent to $15.93m.
NZX said that while market conditions were difficult in the first half of 2008, the result demonstrated the underlying strength and diversity of its businesses. As in previous years the company would not pay an interim dividend.
Operating expenses were flat at $7.93m, while earnings before interest, tax, depreciation and amortisation rose 12 per cent to $8m.
For the NZX Markets business, total operating revenue grew 8 per cent to $14.75m for the first half.
That included revenue for NZX Data up 20 per cent to $5.77m. The key driver was continued growth in demand for NZX Market Information, with the number of real time terminals worldwide up 16 per cent on 2007.
Total listings revenue was down 3 per cent to $4.19 million, NZX said.
Trading, clearing and settlement revenue was down 7 per cent to $2.26m reflecting average daily trades down 7 per cent at 2347 compared with 2512 trades in 2007.
Overall, market conditions were expected to continue to have an impact on listings, trading and clearing and settlement revenues.
Annual listing fees, which were based on market capitalisation and index inclusion, would be negatively affected in the second half of 2008, NZX said.
"The global credit crunch, and its impact on global bank employment numbers, may impact NZX data sales. However, were the recent slight fall in the NZ dollar versus the US dollar to continue, there would be a positive impact on revenues."
NZX said it retained a significant investment focus. As well as the acquisition of news magazine Dairy Week, the company had considerable resources engaged in the development of its new clearing and settlement system.
"Going forward NZX will continue to invest, with a particular focus on adding scale to its traded product set, growing its Australasian data footprint, and gaining exposure to new international markets in areas where NZX has established skills and platforms."
Increasing the liquidity of the NZX Markets had been in the front of its mind as it developed new market infrastructure, NZX said.
Market making, short selling and stock lending were additional liquidity initiatives in progress.
- NZPA
