HKEX Announces Robust Profit Growth in 2023 Despite a Fourth Quarter Dip

Hong Kong Exchanges & Clearing Ltd reported notable financial gains for 2023, although it didn't outperform the extraordinary success of the previous year. Despite a challenging fourth quarter, the company saw its profits rise significantly compared to 2022.

Annual Financial Highlights

In 2023, HKEX's attributable profit reached HKD11.86 billion, roughly USD1.51 billion, marking an 18% increase from the HKD10.08 billion seen in 2022, though still trailing behind the 2021 profit of HKD12.54 billion. The core business revenue also saw an increase, climbing to HKD18.94 billion, a 3.1% rise from the HKD18.37 billion reported in the previous year.

Fourth Quarter Results

The fourth quarter, however, did not mirror the year's overall positive trend. During this period, HKEX's attributable profit fell to HKD2.60 billion, a 13% decrease from the previous year's HKD2.98 billion. Correspondingly, core revenue decreased by 5.4%, resulting in HKD4.52 billion compared to HKD4.77 billion the year before.

The drop in revenue for the fourth quarter was attributed to lower trading and clearing fees in the Cash & Derivatives Markets. Nonetheless, there was a silver lining as the London Metal Exchange experienced higher trading and clearing fees, alongside an upturn in net investment income from Margin Funds and Clearing House Funds.

Dividends and Earnings Per Share

Despite the fourth quarter's performance, HKEX saw an increase in its full-year dividends and earnings per share (EPS). The company declared a final dividend of HKD3.91, up 6.0% from the previous year’s HKD3.69, leading to a total annual dividend of HKD8.41, which is an 18% increase from HKD7.14. Basic earnings per share for 2023 were also up by 18%, reaching HKD9.37 compared to HKD7.96 in 2022.

CEO Nicolas Aguzin remains cautiously optimistic about the future. He believes that despite the challenging macroeconomic and geopolitical landscape, HKEX is well-positioned to benefit from a shift towards Asia, harnessing Hong Kong's strategic position and leveraging current market trends, such as sustainability.

On the day of the announcement, HKEX shares experienced a slight decline, closing 0.8% lower at HKD242.80.

HKEX, profit, earnings