PSE posted 2.7% drop in ’11 net profit to P406M

The Philippine Stock Exchange reported a 2.7-percent decline in net profit last year to P406.19 million as the bourse spent more for business development and infrastructure even as earnings surged from a more vibrant capital market.

In a statement, PSE said higher trading activity and record capital-raising levels boosted its operating revenues by 9.5 percent to P900.76 million from the previous year as the local bourse generated higher trading-related fees (up 15.2 percent), securities clearing service fees (17.8 percent) and listing-related income (6.8 percent).

Trading fees amounted to P202.86 million while service fees generated by its wholly owned Securities Clearing Corp. stood at P254.03 million. Listing-related income reached P429.29 million.

Capital raised at the Philippine stock market such as from initial public offerings, follow-on offerings, stock rights and private placements reached an all-time high level of P107.5 billion last year. This figure was 26.6-percent higher than the amount raised in 2010. The main-share PSEi index last year outperformed all other Asian stock indices.

Five companies embarked on an IPO last year: Megawide Construction Corp., Puregold Price Club, Cirtek Holdings Philippines Corp., Calapan Ventures Inc. and Touch Solutions Inc. These raised a total of P9.04 billion from the market. Philex Petroleum Corp. also listed by way of introduction.

On the other hand, the net profit declined because the PSE’s expenditures had likewise expanded 8.2 percent to P440.59 million. The bourse attributed these to costs related to the development of new products and higher depreciation costs from the newly installed PSEtrade, or the trading engine that replaced the old Maktrade trading system. Repairs and maintenance, including related costs on the new trading engine, also went up in 2012.

“PSE has to put brakes on spending. Income goes up but expenses go up faster,” said Joseph Roxas, president of Eagle Equities Inc.

Meanwhile, other income also declined in the absence of one-time gains booked from trading assets in 2010 amounting to P36.95 million, although this was tempered by gains from investment management account amounting to P12.34 million. Interest income also declined by P18.83 million due to lower interest rates last year.

The PSE also declared a cash dividend of P7 a share, consisting of P2.95 in regular dividends and P4.05 in special cash dividends to stockholders of record as of March 29 payable this April 18.