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ASX reports profit drop following CHESS writedown

4 minute read

The market operator has published its full-year results.

In its full-year results released on Thursday, ASX posted a 37.6 per cent drop in statutory net profit after tax (NPAT) for the financial year ended 30 June to $317.3 million.

ASX noted that its statutory NPAT was impacted by significant items of $173.8 million, including the CHESS replacement derecognition charge disclosed last year, costs related to its CHESS Replacement Partnership Program, and the reversal of Yieldbroker impairment.

Excluding one-off charges, the market operator’s underlying NPAT decreased by 3.4 per cent compared to the previous financial year to $491.1 million.

Operating revenue dipped by 1.2 per cent to $1.01 billion, reflecting growth in listings revenue and greater demand for information and technical services, but also weaker equity trading and securities payments activity.

“In one of the fastest tightening monetary cycles on record, with geopolitical tension and lower equity trading volumes, ASX has delivered a resilient underlying financial result,” commented ASX managing director and chief executive officer Helen Lofthouse.

“This is the second time the group has achieved a full-year operating revenue performance of over $1 billion, underscoring the strength of our diversified business model.”

ASX said performance across its four divisions was “mixed” over the period, with falling revenue for markets and securities and payments offset by higher revenue for listings and technology and data.

Earnings before interest and tax (EBIT) fell by 7.8 per cent to $635.6 million, while net interest income increased by 72.4 per cent to $70.8 million thanks to higher interest on cash balances.

Expenses increased by 12.3 per cent to $374.6 million following increased investment in risk management and technology-related activities along with CHESS-related review costs. Capital expenditure was down 6.2 per cent to $98.7 million due to the CHESS replacement pause.

Alongside its results, ASX also published the second of three special reports required by ASIC.

The market operator said that the report confirmed it is making good progress on implementing the 45 recommendations from the external review into the CHESS replacement.

“Prioritising our regulatory commitments and executing the multi-year technology modernisation program is a key focus for me and my executive team. We’re conscious that we face heightened risk in these areas and we are taking action to manage and mitigate these risks,” said Ms Lofthouse.

A final dividend of 112.1 cents per share fully franked has been announced, taking ASX’s total dividends for the year to 228.3 cents per share.

“The strength of ASX’s core businesses has allowed us to deliver a solid underlying performance during a period of volatility and uncertainty. We remain excited about the opportunities ahead and are committed to ensuring the long-term sustainability of ASX,” Ms Lofthouse said.

ASX noted that it expects that reduced inflationary pressures and growing confidence around the peak for interest rates should prove positive for cash market trading volumes. A “solid pipeline” of corporates were said to be considering listing on ASX as conditions improve.

The market operator reiterated guidance provided at its Investor Day in June, with total expense growth of 12–15 per cent expected over the 2024 financial year. ASX has an operating expense review underway which it expects will bring this figure down in the 2025 financial year.

Meanwhile, capital expenditure for the 2024 financial year is expected to fall within the range of $110 and $140 million, driven by ASX’s investment in technology modernisation.

Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.