ASX posted a 5.6 per cent surge in statutory net profit after tax (NPAT) to $243.5 million in the first half of FY2024–25.
In a note on Thursday, ASX reported that its statutory NPAT increase reflected the benefits of higher operating revenue and net interest income, offset by a significant item of $10.2 million.
Excluding one-off charges, the market operator’s underlying NPAT also benefited from growth in net interest income, increasing by 10.1 per cent over the prior corresponding period to $253.7 million.
ASX also saw record first half operating revenue of $541.9 million, up 5.9 per cent on 1H24, supported by strong growth in three of four lines of its business.
“We have delivered a record operating revenue for a first half, which reflects the strength of our businesses and the value they create for the markets in which we operate,” ASX managing director and chief executive Helen Lofthouse said.
“Our performance was driven by growth in our markets, technology and data, and securities and payments divisions, while revenue in our listings business remained stable during the half.”
Namely, markets generated revenue of $168.4 per cent in 1H25, up 9.9 per cent, while technology and data revenue grew 6.7 per cent to $132.9 million. Moreover, securities and payments generated revenue of $135.7 million, growth of 5.2 per cent, and listings revenue stayed at $104.9 million.
Moreover, earnings before interest and tax increased by 10.5 per cent to $321.6 million, while net interest income was up 9.4 per cent to $43.1 million, thanks to higher net interest received from ASX’s cash balances and collateral balances.
Notably, expenses over the period fell by 0.2 per cent to $220.3 million, in contrast to the 26.9 per cent surge it saw in 1H24.
The exchange attributed this to the benefits of “expense management initiatives”, in addition to lower regulatory expenses, offset by an increase in equipment costs.
“While we are investing in the delivery of our strategy, we have also continued our cost conscious approach on the way we run the business and we have reconfirmed our total expense growth guidance for FY25,” Lofthouse said, with expense growth guidance of between 6 and 9 per cent over the fiscal year.
Delving into these initiatives on Thursday, ASX chief financial officer Andrew Tobin said during the company’s 1H25 presentation that employee expenses were down by 4 per cent, reflecting ASX’s reduced use of contractors and recruitment costs.
The company also saw a decline in administration and regulatory expenses, which reduced by 60.3 per cent.
“We are continuing our cost-conscious approach in FY25 and have made further progress on workforce optimisation in the first half, primarily by reducing the use of contractors. We remain focused on other cost optimisation opportunities, including process simplification and strategic procurement,” Tobin said.
Meanwhile, an interim dividend of 111.2 cents per share fully franked has been announced, representing a 9.9 per cent increase on 1H24 and a payout ratio of 85 per cent of underlying NPAT.
Moreover, capital expenditure for FY24–25 is expected to fall within the range of $160 million and $180 million, which ASX said is likely to remain in this range until FY26–27, primarily driven by its technology and modernisation program.
Looking ahead, Lofthouse confirmed that ASX is almost two years into its five-year strategy.
“During 1H25, we continued the disciplined execution of our strategic priorities, which remain focused on delivering our technology modernisation roadmap and uplift of our regulatory and risk management practices,” she said.
However, the managing director conceded that there is “much more to do as we continue building a new era for ASX”, with its project to replace its CHESS system remaining as a high priority.
ASX has been in hot water over its CHESS replacement project for some time, with both the Australian Securities and Investments Commission (ASIC) and the Reserve Bank exerting pressure on the stock exchange to press on with the project. Notably, ASIC earlier this month commenced an investigation into a CHESS Batch Settlement incident that occurred in December.
“The project to replace our clearing and settlement system, CHESS, remains a high priority. We’re planning for the first industry test environment for Release 1, which is for the clearing services component of the project, to open later this month, marking a significant milestone for the project,” Lofthouse added.
