ASX profits AU$246m in six months of tech foundation strengthening

The securities exchange has upped its technological foundations and boosted its after-tax profit by AU$15.6 million.
Written by Asha Barbaschow, Contributor

The Australian Securities Exchange (ASX) has reported after-tax profit of AU$246 million for the first half of the financial year, up AU$15.6 million from the same period a year prior.

Operating revenue for the six-month period was AU$425 million, with earnings before interest, tax, depreciation, and amortisation (EBITDA) increasing 5.6 percent to AU$319.5 million.

During the reported period, ASX upped its operating expenses by 9.4 percent to AU$105 million, with the exchange investing in its platform to strengthen its "technological foundations".

"ASX is subject to increasingly complex technology and risk environments," ASX managing director and CEO Dominic Stevens said in a statement.

"Throughout the half, we took steps to strengthen ASX's operational and technological foundations, which help ensure our resilience and create a solid platform for growth."

Throughout the six months, Stevens said ASX progressed on its core initiatives, including the implementation of the replacement program to its legacy Clearing House Electronic Subregister System (CHESS) platform, the upgrade of its secondary data centre, and the restructure of ASX's Listings Compliance team.

ASX announced in June 2016 that it was building a new post-trade solution using blockchain technology. The CHESS replacement system has been touted as the world's first industrial-scale blockchain-based system for use in financial services and after being pushed out from its original go-live, is scheduled for the first-half of 2021.

"These systems have served the market well over many years. We are replacing or upgrading them with contemporary infrastructure to allow ASX and its customers to take advantage of opportunities in the decade ahead," Stevens said on Thursday.

"Importantly, these are once-in-a-generation projects. But, they are still part of the normal long-term program of renewal across all our technology."

Meanwhile, ASX expects its new secondary data centre to be completed by the end of the year.

"ASX also pursued new business opportunities, which leverage our expertise and infrastructure, and provide opportunities for customers," Stevens continued.

"One example is the development of a new data platform to provide clients with more ASX data and analytical tools. Another is our investment in Sympli, a joint venture focused on delivering the benefits of e-conveyancing in the property market."

During ASX's results call, Stevens said that much of the work needed to go live with its data analytics business was completed in the first half of the financial year, and that the exchange is planning to on-board customers over the coming six months.

Over the last 12-18 months, ASX said it has been building a broad range of capabilities to support its data analytics offering, including: A secure and scalable technical platform that has access to machine learning tools, a range of data science languages, and a broad range of data sets; and a governance and legal framework to support data management, data access, and an ecosystem of data contributors and product developers.


Here's what to expect from ASX's blockchain-based CHESS replacement

What started as a Google search will result in the first financial services industrial-scale blockchain use case.

ASX asked to up risk management practices following equity market outage

ASIC has made a number of recommendations to the ASX to further its risk management, telling the exchange robust technology governance and operational risk management is central to its effectiveness as a market infrastructure provider.

Australian Securities Exchange looks to artificial intelligence and big data analytics

In delivering its first-half AU$230.5 million after-tax profit, the ASX unveiled a number of tech-based projects it has in the pipeline aimed at making business easier for ASX-listed companies, as well as for its own internal processes.

Editorial standards