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

Last week, stock exchange operator Singapore Exchange Limited (SGX: S68) released its first quarter earnings for its fiscal year ending 30 June 2018 (FY2018). There are both positive and negative takeaways that investors may want to learn about.

The positives

Firstly, Singapore Exchange’s total operating revenue grew by 7.2% year-on-year to S$204.5 million in the reporting quarter. The company has three business segments – Equities & Fixed Income, Derivatives, and Market Data & Connectivity – and all of them turned in higher revenue.

Secondly, Singapore Exchange’s operating expenses increased at a slower pace than revenue in the quarter (5.1% versus 7.2%). As a result, operating profit jumped by 9.1% to S$106.0 million.

Thirdly, Singapore Exchange continued to maintain a strong balance sheet. As of 30 September 2017, the company had S$871 million in cash and cash equivalents, and zero debt.

The negative

Within the Equities & Fixed income business segment is a sub-segment named Post Trade Services. This sub-segment saw its revenue decline by 9% year-on-year to S$26.4 million in the reporting quarter, due to a change in the mix of securities settlements, and lower number of contracts processed as brokers migrate the processing to their own back office.

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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. The Motley Fool Singapore has a recommendation for Singapore Exchange.