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NZX first-quarter profit falls 3% as costs growth outpaces revenue, sees pickup

Monday 17th May 2010

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NZX reported a 3% decline in first-quarter earnings as acquisitions pushed up operating costs more than revenue.

Net income fell to $2.9 million in the three months ended March 31, from $3 million a year earlier, the Wellington-based company said in a statement today. Operating revenue jumped 46% to $11.9 million.

NZX is expanding from its core listings and market data businesses, acquiring energy trading and agri-business media assets in the second half of 2009 which have “reshaped” the company. Acquisitions helped drive up operating costs by 113%, led by employee costs, the company said today.

Revenue was swelled by some $3.1 million with the inclusion of its energy markets and agri-business units. Market data sales dropped 30% to $2.29 million.

“There are strong indications in the market data business that the bottom has been reached and the upswing initiated,” NZX said in the statement.

Market data sales rose 1% compared to the fourth quarter of 2009, the first increase in more than 15 months.NZX is evolving its business and said in March that it expects 50% of its future revenues to come from fees on clearing and settlement services and high margins obtainable from derivatives trading.

The bourse operator’s Clearing House is to be capitalised with $10 million of risk capital and provided with $2.5 million of working capital, it said today.

Head of traded products Fiona Mackenzie called the clearing house facilities "the core we never had" in her March presentation and said the system was essential to running a derivatives trading platform.

Separately, NZX today released operating figures for the three months ended March 31, showing the total number of trades climbed 11% to 129,803 while the value of trading edged up 1% to $5.19 billion.

Shares of NZX were unchanged at $1.75 and have declined about 20% in the past three months.

 

 

 

Businesswire.co.nz



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