The London Metal Exchange posted a 36 percent jump in revenue for 2015 to HK1.735 billion ($223.15 million), as higher trading fees and tariffs helped it offset a drop in volumes, its Hong Kong owner said on March 02.
The revenue gains at its London unit was a key contributor to Hong Kong Exchanges and Clearing Ltd's (HKEx) record net profit last year, showing the payback has begun from its $2.2 billion buyout of the 139-year old metals bourse near the height of the commodities boom in 2012.
"Despite the 4 percent drop in the average daily volume of metals contracts traded, trading fees and tariff rose by HK$476 million, or 51 percent, as a result of commercialising the LME's trading fees, effective from January 1, 2015," HKEx said in an earnings release.
Trading volumes on the LME, the world's biggest metals exchange by volume, shrank 4.3 percent in 2015, dented by slowing growth in Chinese demand for commodities, data from the bourse showed in January.
HKEx reported a net profit for 2015 of HK$7.96 billion ($1.02 billion), slightly above analysts' expectations of HK$7.913 billion, according to Thomson Reuters data.
The LME's operating expenses dropped by $22 million, or 4 percent, helped by a drop in legal fees in 2015. The LME fought off a string of litigation due to backlogs at warehouses it monitored which drove up legal costs in 2014. The bourse is in its final stages of its warehousing reform.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 68 per cent to $1.19 billion.
To grow its commodities business, CEO Charles Li said in January that the bourse intended to expand its suite of LME products and develop a spot commodities trading platform in mainland China.
It is also continuing to commercialise its metals business. It will, from April 4, introduce new charges for the use of its benchmark data by firms who are not members of the exchange or their clients.