ASX today posted its results for the first half of fiscal year 2023, with earnings affected by the charge related to the pause in the CHESS replacement project.

Statutory profit was $73.7 million for the period. Underlying net profit after tax (NPAT) of $250 million was broadly in line with the prior comparative period, down 0.1%.

As announced last November, ASX took a derecognition charge of $176.3 million in relation to the pause in the CHESS replacement project. This was recognised as a significant item for the half and reduced statutory NPAT by 70.6%.

Operating revenue, at $499.5 million, was marginally weaker by 0.4% during the half, reflecting the strength of ASX’s diversified operating model.

During the period, Listings revenue rose 5.4% to $109.7 million while revenue from Technology and Data was up 8.3% to $117.5 million. ASX also benefitted from a strong rise in net interest income. Offsetting this, Markets revenue declined 2.2% to $138.8 million and revenue in the Securities and Payments business was 9.1% lower at $133.5 million.

Total expenses were 6.8% higher which was driven by additional resource commitments to technology, risk management and customer activities, and was partially offset by a lower depreciation charge.

In terms of outlook, ASX said:

“We expect continued uncertainty in the external environment from current global economic conditions, inflationary pressures and ongoing geopolitical tensions. The IPO market remains subdued due to this ongoing uncertainty which is also impacting cash market trading volumes. Expense growth guidance remains unchanged at between 10 percent and 12 percent, primarily driven by ongoing build-out of technology, risk management and customer activities.

We also have increased assurance costs in relation to current CHESS and solution design costs for CHESS replacement which impact the second half. Capex guidance has been revised downwards to between $100 million and $115 million, reflecting the pause in the CHESS replacement project. The total cost of the CHESS Replacement Partnership Program will be capped at $70 million and recognised as a significant item. Approximately $25 million of this is expected to be incurred in the second half of FY23”.