NZX net profit falls 11 per cent

Exchange operator NZX said today its third quarter profit fell 11 per cent in the third quarter to $1.525 million.

Third quarter operating revenue increased 8 per cent to $6 million from $5.54m in the same period of 2005, while interest income fell.

Revenue from the Market Information business was $1.32m, compared with $853,000 over the same quarter last year.

Trading, clearing and settlement revenue was $1.15m, compared with $1.35m in the same quarter last year.

Flat earnings in that business reflected slowed activity levels seen in the markets during the post quarter, NZX said.

"Whilst NZX believes the worst of these conditions is over, the results reflect that NZX has minimised its vulnerability to these external factors."

Third quarter operating revenue for the Smartshares business was $615,000, compared with $398,000 for the same quarter last year.

Smartshares operating ebitda (earnings before interest, tax, depreciation and amortisation) was $128,000 compared with $23,000 in the third quarter of 2005.

Smartshares finished the quarter with $468m in funds under management, while the number of Smartshares unit-holders increased to 14,645 from 10,910 at the same time last year.

Equity accounted associate company Link Market Services produced an improved ebitda performance and NZX expected it to be in a position to pay a dividend at year end.

NZX operating ebitda for the year to date was up 17 per cent on the same period a year earlier at $6.25m.

Operating revenue for the nine months was up 16 per cent at $16.4m, with operating expenses up 15 per cent to $10.2m.

Earnings before interest and tax for the year to date was up 34 per cent to $5.18m.

Third quarter cost increases for NZX Markets reflected feasibility and related costs on NZX's behalf associated with the Australian Electronic Communications Network (ECN), and staff hired to manage the NZX service delivery of market supervision and market operation services to the project.

NZX intended to launch the ECN in partnership with five major Australian banks during 2007.

It said it expected that upon the launch significant services revenue would be associated with the costs, as well as potentially reduced levels of overall technology costs to NZX as a result of spreading single technology solutions over two markets.

- NZPA