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The Good And The Bad That Investors Should Know About Singapore Exchange Limited’s Fiscal Fourth Quarter Earnings

Singapore Exchange Limited (SGX: S68) is the only stock exchange operator in Singapore. But it does more than just run the local bourse – the company has three business lines, namely, Equities & Fixed Income, Derivatives, and Market Data & Connectivity.

In late July, Singapore Exchange released its fourth quarter earnings for its fiscal year ended 30 June 2017 (FY2017). There are both positive and negative takeaways that investors may want to learn about. Let’s take a look, starting with an overview of the numbers:

1. The overall result

You can see Singapore Exchange’s most recent quarterly income statement below:


Source: Singapore Exchange FY2017 fourth quarter earnings announcement

The company managed to enjoy healthy growth in both revenue and net profit during the quarter.

2. The positives

Firstly, all three of Singapore Exchange’s segments grew their revenues in the fourth quarter of FY2017 compared to the same period last year. The rate of growth ranged from 0.7% to 5.8%.

Secondly, operating expenses increased at a slower pace than revenue during the reporting quarter. As a result, operating profit grew faster than revenue.

Thirdly, Singapore Exchange continued to maintain a strong balance sheet. As of 30 June 2017, the company has S$796.4 million in cash and cash equivalents, and zero debt.

3. The negative

Singapore Exchange managed to generate a respectable S$317.6 million in free cash flow during the whole of FY2017. But, that’s a decline from the S$349.6 million in free cash flow produced a year ago. This partly explained why Singapore Exchange’s balance sheet weakened compared to 30 June 2016; back then, the company had S$866.3 million in cash and cash equivalents, down from S$796.4 million a year ago.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool Singapore has a recommendation for Singapore Exchange.