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10 Things That Investors Should Know About Singapore Exchange Limited’s Record High Earnings

On Friday, Singapore Exchange Limited (SGX: S68) announced its financial results for the third quarter ended 31 March 2018. The company has three primary business segments – Equities and Fixed Income, Derivatives, and Market Data and Connectivity.

Here are 10 things investors should know from the latest earnings announcement:

1. Revenue rose 10% year-on-year to S$222 million, driven by stronger performance in the Equities and Fixed Income and Derivatives segments, offset by weaker performance in the Market Data and Connectivity segment.

2. Operating profit was up by 15% due to higher revenue and slower increase in operating expenses.

3. Profit attributable to shareholders surged by 21% to S$100 million. This was the highest in the last ten years.

4. Singapore Exchange’s diluted earnings per share (EPS) went up by 21% year-on-year to 9.4 Singapore cents.

5. Net profit margin grew from 41% last year to 45% in the latest quarter.

6. As at 31 March 2018, the company had S$800 million in cash on the balance sheet with no debt. As a comparison, at the end of June last year, it had a net cash of S$796.4 million.

7. Operating cash flow for the quarter was S$130 million, up from S$101 million last year. The improvement in operating cash flow was mainly due to increase in profitability.

8. Segment wise, Equities and Fixed Income’s revenue gained 5% to S$108 million. Derivatives’ revenue jumped 20% to S$91 million while Market Data and Connectivity’s revenue declined by 2% to S$24 million.

9. An interim dividend of five cents per share was declared, unchanged from a year ago.

10. Singapore Exchange’s chief executive, Loh Boon Chye, gave the following outlook:

“Market activity is expected to improve as investors seek avenues to manage their portfolio risk. We will continue to build on our multi-asset offering and increase our servicing and marketing efforts across our domestic and international client base. We will also strengthen our global network through strategic partnerships and alliances.”

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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 Limited.