ASX posted a 212.8 per cent surge in statutory net profit after tax (NPAT) for the first half of financial year 2024 to $230.5 million.
In a note on Friday, ASX reported that its statutory NPAT increased substantially as the prior period included the derecognition charge of $176.3 million on its CHESS replacement project.
Excluding one-off charges, the market operator’s underlying NPAT decreased by 7.8 per cent compared to the previous comparative period, also to $230.5 million.
Moreover, ASX saw record first half operating revenue of $511.7 million, up 2.4 per cent, boosted by growth in its markets, as well as technology and data businesses, but was offset by declines in its listings and securities and payments business.
“This result shows the strength of our diversified business model, with ASX delivering record revenue for a first half result,” commented ASX managing director and chief executive officer Helen Lofthouse.
“This was driven by strong demand for futures products and data services, which was offset by soft market conditions affecting those businesses exposed to cash market trading volumes.”
Earnings before interest and tax (EBIT) fell by 10.6 per cent to $291 million, while net interest income increased 20.9 per cent thanks to rising interest rates contributing to solid returns on cash balances held.
Expenses increased by 26.9 per cent to $220.7 million, which the exchange attributed to an uplift in headcount and administration costs to elevate risk and compliance capabilities, alongside regulatory costs and investment in near-term focus areas of technology modernisation and regulatory commitments.
“At our Investor Day in June last year, we recognised ASX was facing a period of elevated expenses given our regulatory commitments and technology modernisation roadmap, and we set out forward guidance that reflected this,” Ms Lofthouse clarified.
“In terms of guidance, FY24 total expenses growth is expected to remain within our previously stated range of between 12 per cent and 15 per cent, and we confirm that business rationalisation actions are underway to reduce the total expense growth rate in FY25.”
According to the ASX, it has several “expense management” initiatives underway, including reducing the use of contractors and consultants, and optimising procurement strategy.
Ms Lofthouse said: “We’ve been working through a range of business rationalisation measures that are intended to unlock capacity for our highest priority areas while also laying the foundations for a more sustainable cost profile.”
Namely, last week, the group initiated a “targeted restructure”, with an estimated 3 per cent of its non-project workforce to be impacted, with several divisions undertaking a reorganisation of team structures.
This is expected to save around $11 million in operating expenses.
Meanwhile, an interim dividend of 101.2 cents per share fully franked has been announced, 15 cents per share lower than 1H23.
This, the market operator said, represents a payout ratio of 85 per cent of underlying NPA, which was the midpoint of the payout range previously disclosed.
Capital expenditure for FY24 is expected to fall within the range of $110 and $140 million, driven by ASX’s investment in technology modernisation.
