Article Tools
TORONTO - TMX Group Inc. (TSX:X) says the economic slowdown helped weaken revenues by $9 million and cut net income during the third-quarter, but the CEO behind the operator of Canada's main stock exchanges believes market conditions are starting to improve.
"We do see encouraging signs in some of our businesses," chief executive Thomas Kloet told analysts in a conference call Wednesday after the closing bell.
"Our focus on cost remains a priority. At every level, in every business unit, we're targeting operational efficiency, seeking synergies from acquisitions and striving to limit expenses that are not core to our business."
Earlier in the day, the company reported that third-quarter earnings were $41.7 million or 56 cents a share, down from $50.9 million or 66 cents a year in the year-ago period.
Revenue for the quarter was $130.2 million, down from $139.2 million.
The company tied the profit decline to lower equity trading revenue on the Toronto Stock Exchange, lower issuer services revenue and investment income, and higher costs for new technology.
Decreases were partially offset by higher revenue from energy trading at its Calgary-based NGX unit, cash markets equity trading revenue on the TSX Venture Exchange and fixed income trading.
TMX Group, which operates exchanges in both Toronto and Montreal, has traditionally had a relatively cushy position in Canada as the country's only major stock market, but in recent years other companies have been trying to grab a share of the market.
Both Alpha Trading Systems and the Canadian National Stock Exchange have launched systems in recent years, and with them aggressive promotional campaigns to attract companies listed on the TMX exchanges.
While neither system has had a major impact on the TMX, Alpha is considered most worrisome because it's backed by the big Canadian banks and Thomson Reuters, which means there's lots of capital available to invest in its growth.
"We are operating in a hyper competitive market, one that requires strategic investments in key parts of the business, particularly in regards to technology," Kloet said, adding that the TMX is already making those investments.
Kloet downplayed the emergence of new competitors, and their impact on the TMX's market share.
Rate this article
