Why is the ASX Ltd (ASX:ASX) share price slipping today?

The ASX Ltd (ASX:ASX) share price is slipping in early morning trade, down 2%. We look at the company’s latest financial results.

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The ASX Ltd (ASX: ASX) share price is slipping in early morning trade.

At the time of writing, the ASX share price is down 2%. This comes after the Australian listings venue released its half-year results for the 2021 financial year ending 31 December.

What results did ASX report for 1H21?

In this morning’s release, ASX reported a net profit after taxes (NPAT) of $241.8 million for 1H21, down 3.4% from 1H20. That fall came despite a 1.3% increase in earnings before income and taxes (EBIT). The company pointed to lower interest rates cutting into its interest earnings for the fall in NPAT.

Operating revenue of $470.5 million was up 3.4% over the previous corresponding period. ASX said that the decline in its derivatives and OTC Markets, with lower short-term interest rate futures volumes, was offset by growth in listings and equity activities.

The 85 new listings over the half-year were up more than 50% from the previous half. The almost $52 billion in total capital raised represented a 24% increase. Most of that growth came from initial public offering (IPO) capital.

The interim dividend will fall the same amount as NPAT, a decrease of 3.4% to 112.4 cents.

Comments from the CEO

Regarding the results, Dominic Stevens, ASX Managing Director and CEO, said:

The strength of ASX’s diversified business is evident in the overall result for the first half of the 2021 financial year…Revenue growth in our cash equities-related activities – particularly Listings and Issuer Services, and Trading Services – offset the economic impact of COVID-19 and the RBA’s yield curve control program on our Derivatives and OTC Markets business…

The Derivatives and OTC business continued to be impacted by the COVID-driven yield curve control measures at the short-end of Australia’s interest rate curve. While overall futures volumes were down more than 15%, 10-year bond futures volumes were up almost 17%.

Looking at the year ahead, Stevens predicted that the impact of the pandemic was likely to linger, but said ASX is up to the challenge:

As expected, the challenges arising from COVID were felt during the half and are likely to continue for at least the short term. ASX remains well positioned to serve Australia’s financial markets and our shareholders, given our mix of businesses, product and operational expertise, and commitment to investing in the technology that supports our industry’s integrity and growth.

ASX share price snapshot

The ASX share price rebounded strongly from last autumn’s viral induced falls. However, the past 6 months have largely seen the ASX share price trend lower. Shares are down 17% since 11 August. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 12% in that same time.

Year-to-date the ASX share price is down 3.5%.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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