TMX Group Posts Third-Quarter Profit After Maple Takeover

TMX Group Ltd., the Toronto Stock Exchange owner bought by a group of banks and pension funds, posted third-quarter profit after a C$3.73 billion ($3.7 billion) takeover combined Canada’s stock markets with securities clearing.

TMX, which reported two months of earnings from the takeover, had net income of C$15.3 million, or 53 cents a share, the Toronto-based company said in a statement today. Revenue was C$113.4 million.

TMX Group Inc. was acquired in September by Maple Group Acquisition Corp. as part of a takeover that combined its competitor, Alpha Group, and the Canadian Depository for Securities Ltd. clearinghouse. Maple, comprised of 12 Canadian banks and pension funds, was renamed TMX Group Ltd. on Aug. 10.

Revenue fell 3 percent to C$162.3 million on a slowdown in trading volume and listing fees, when combining results of TMX Group Inc., CDS and Alpha for the period, the exchange owner said.

“It’s quite clear that the global market environment has continued to affect TMX Group’s financial performance,” Thomas Kloet, TMX chief executive officer, said today on a conference call. “It appears that the global economic recovery remains fragile, moving at what some would call a glacial pace.”

‘Key Priority’

TMX was expected to report profit of 74 cents a share excluding some items for three months, according to the average estimate of five analysts surveyed by Bloomberg.

Shares of the exchange owner fell 0.6 percent to C$48.38 at 4 p.m. trading in Toronto.

TMX will cut 100 jobs over the next 12 months as it integrates Alpha and CDS, Kloet said. Alpha is now overseen by Robert Fotheringham, senior vice president of equity trading, following last month’s departure of CEO Jos Schmitt. TMX has reversed Alpha’s plans to become a listing venue, and its operations will be migrated onto the TMX Quantum trading engine by the end of June, Kloet said.

TMX’s “key priority” remains integration, though takeovers will be considered as they arise, according to Kloet.

“We’re very focused on the integration but we’re still watching these opportunities come forward,” Kloet said. “Our pencil is very sharp.”

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