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NZX Net Profit Rises 280 Pct, Boosted By Asset Sales

Fuseworks Media
Fuseworks Media

Wellington, March 1 NZPA - Stock exchange operator NZX nearly quadrupled net profit in 2009, and this year will launch its derivative market, representing "a fundamental turning point in the profile and prospects for the NZX Group".

The company today said its net profit for the 2009 full year was $38.7 million, up from $10.2m the year before, with the result in the latest year boosted by sales of its carbon registry business and its shares in the Bond Exchange of South Africa.

Despite the increase from 2008, the 2009 full year profit is lower than the half year profit, hurt by NZX's move to reduce the valuation on its balance sheet for a prospective 2012 performance payment for the sale of the TZ1 Registry business.

At the 2009 half year, NZX said it made a net gain of $52.1m on the TZ1 sale, but last month said it was reducing the valuation on its balance sheet for a prospective 2012 performance payment from the TZ1 sale due to the lower priority given to carbon trading following the Copenhagen climate conference.

It reduced by $19.9m the gain on disposition of assets as held on the NZX balance sheet, and in the full year result put the gain on disposition of assets relating to the TZ1 sale at $31.5m.

Revenue grew 33 percent from 2008 to $42.8m in 2009, driven by existing agricultural data and acquisitions of businesses in the energy and agricultural area, NZX said today.

Revenues from the securities business were largely flat, reflecting difficult macro capital market conditions in trading, data sales and IPOs.

Operating expenditure rose 89 percent to $25.3m due to the larger shape of the business, integration costs, major project costs, and a significant number of one-off items and transaction related items.

After a 4:1 share split in December, NZX is to pay a dividend of 6.5c per share for the year. The company intends to increase the annual dividend by at least 1c a year for the next five years.

NZX said that during 2010 it would launch its first derivative products.

Derivatives for the dairy industry, energy and equities were each expected to be launched in 2010, NZX said.

"This represents a fundamental turning point in the profile and prospects for the NZX Group. NZX is determined to build a robust, multi-product derivatives franchise that develops global distinctiveness, in particular in the agriculture and energy areas."

NZX is also this year expecting to launch its Clearing House, its largest project to date, providing a central counter-party clearing system.

During 2009, listings revenue rose 30 percent to $11.6m, with record levels of capital raising on both the NZDX and via secondary equity raisings on the main board, NZX said.

Trading revenue fell 6 percent to $5m, with the major factor in the fall being a 3 percent fall in the average number of daily trades.

Revenue generated from the sale of data from the markets NZX operates slipped 3 percent to $10.6m, reflecting a fall in data terminal numbers, as well as unfavourable exchange rate movements between the New Zealand and United States dollars.

Clearing and settlement fees from post trade systems in securities and energy rose 53 percent to $4.5m.

For 2010, NZX said it expected a strong year for listings. It was confident of a stronger IPO market for equities and a continuation in secondary equity raisings, albeit for more of a growth than a recapitalisation agenda.

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