Exchange operator TMX Group , which is in talks to be bought by a consortium of Canadian financial institutions, reported a weaker-than-expected quarterly profit on Wednesday, largely because of a slowdown in listings and equity trading.
TMX, which owns the Toronto Stock Exchange and the TSX Venture Exchange, said the 21.3-per-cent decline in its quarterly profit also resulted from higher costs linked to its proposed acquisition by the Maple consortium.
Net income at TMX, which also owns the Montreal derivatives market, fell to $52.7-million, or 70 cents a share, from $67-million, or 90 cents a share, a year earlier.
Excluding one-time merger-related costs and other items, the company reported earnings of 74 cents a share, well below the analysts’ average estimate of 84 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 7 per cent to C$161.7-million.
Cash markets revenue in the quarter fell 29 per cent, while issuer services revenue fell 17 per cent.
“Partially offsetting this decreased revenue was strength in our derivatives business, both from (the) Montreal Exchange and Boston Options Exchange,” chief financial officer Michael Ptasznik said in a statement.
Mr. Ptasznik added that costs also rose, as the company continued to deploy new technologies and add resources to generate growth.
Toronto-based TMX said pretax costs from the Maple deal were $5.7-million in the quarter.
The Maple Group of 13 banks, pension funds and other financial companies is awaiting regulatory approval of its proposed takeover of TMX.
Maple has said the deal is contingent on the regulatory approval of Alpha Group, TMX’s biggest domestic rival, as well as the Canadian Depository for Securities, which clears and settles trades in the country.