NZX posts third-quarter loss

Friday 30th October 2009

NZX, which operates New Zealand’s stock exchange, posted a third-quarter net loss, as the strengthening kiwi dollar reduced the value of the Markit shares it got in the sale of its TZ1 registry business. The adjustment offset the benefits of increased operating revenue.

The net loss was $2.37 million in the three months ended Sept. 30, compared to a net profit of $2.8 million a year earlier, the Wellington-based company said in a statement. It recognised a $4.8 million decline in the value of investments in the third quarter, mainly reflecting the Markit shares, compared to no change in the same period a year earlier.

Operating revenue climbed to $12.5 million from $8.1 million a year earlier, including the jump in the contribution from its Agri-business and energy divisions, reflecting acquisitions.

The shares rose 1.4% to $8 today and have soared 61% this year, making them a stand-out on the NZX’s own bourse. Chief executive Mark Weldon has turned profits from the sale of assets and expanded in agricultural data and energy, buying media assets and the M-Co market for spot electricity trading.

NZX is also preparing to launch cash-settled dairy futures, betting on strong demand in a nation whose exports are dominated by primary produce. The shares are rated ‘outperform,’ based on the average of four recommendations compiled by Reuters.

“NZX now owns an integrated set of businesses with expertise in information, infrastructure and markets across the securities, energy and agri-business sectors,” Weldon said in a statement. The businesses provide “a strong set of interrelated opportunities,” he said.

The bourse operator predicts stronger revenue in the fourth-quarter, underpinned by ongoing capital raisings and several IPOs hovering over the market. The company expects to improve the processes between its newly acquired businesses over the coming year, and this will lead to cost-savings.

NZX said it should settle the conditional purchase of CLEAR Group’s grain exchange in the next two weeks.

Businesswire.co.nz

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