Canada's TMX posts profit, first results post-takeover

Fri Nov 9, 2012 3:19pm EST
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By Solarina Ho

TORONTO (Reuters) - Canada's TMX Group Ltd X.TO will focus on paying down C$1.5 billion ($1.50 billion) in loans, even as it looks for chances to expand its business through acquisitions, the operator of the Toronto Stock Exchange (TSX) said on Friday.

TMX reported a third-quarter profit in its first quarterly statement since it was taken over by a consortium of major Canadian financial institutions, but said earnings were hurt by a slowdown in capital markets activity and uncertain macroeconomic conditions.

"It's been generally a tough summer across the exchange landscape," said Ed Ditmire, an analyst with Macquarie Research.

Chief Executive Tom Kloet, who has continued to lead the company since its acquisition, told analysts on a conference call that TMX is focused on paying down its large debt load related to the takeover and integrating former rival Alpha, as well as clearinghouse Canadian Depository for Securities Ltd (CDS).

Alpha will continue to operate as a marketplace, but not as a listing venue, Kloet said, adding that 100 jobs will be cut over the next 12 months as part of the integration process. TMX has 1,344 employees overall.

Despite the company's post-takeover focus on bringing Alpha and CDS into its fold, company executives said they will continue to look for new avenues of growth.

"The marketplace is moving and there will be opportunities out there that will be very interesting to us ... whether it's domestically or internationally," Kloet said.

"We are very focused on integration but we're still watching these opportunities come forward. Our pencil is very sharp."   Continued...