05/10/2013 07:29 EDT | Updated 07/10/2013 05:12 EDT

TMX Group sees sharp drop in listings, trade volumes due to market uncertainty

TORONTO - A drop in new listings, financings and trade volumes hurt the operator of Canada's largest stock exchange in the first quarter.

And Thomas Kloet, chief executive officer of TMX Group Limited (TSX:X), says market uncertainty is expected to continue in the near term.

"We are continuing to carefully manage our costs," Kloet said Friday during a conference call to discuss the company's earnings.

"Our company has deep experience in managing effectively through economic ups and downs. So I am confident that we will successfully move through the external challenges we face today."

There were only 40 new listings on the TSX and TSX Venture Exchange in the quarter, compared with 86 in the same period last year. Total equity capital raised was down 42 per cent from a year ago.

The resources sector saw the largest drop in new listings and financings. The number of new listings in the mining sector went down 59 per cent from a year ago, while the number of new oil and gas listings dropped 50 per cent.

Equity capital raised in the mining sector fell 63 per cent from the same 2012 period, while oil and gas financings dropped 76 per cent.

Kloet said the real estate and technology sectors showed some strength.

Total volumes on the Toronto Stock Exchange, the TSX Venture Exchange, Alpha and TMX Select were down 22 per cent from the same year-earlier period. Those declines were slightly offset by the Montreal Exchange, which saw its volume increase by one per cent.

TMXGroup said reported first-quarter net profit of $37.8 million, or 70 cents per share. Revenues were $172.2 million for the three months ended March 31.

In the same 2012 period, the TMX reported a net loss of $4.4 million, but the results were not comparable because of a change in ownership late last year and the consolidation of various platforms.

The TMX Group was acquired by some of Canada's largest banks, pension funds and other financial services as members of what was known as the Maple Group.

Adjusted diluted earnings per share were 78 cents in the latest period, excluding three cents per share of Maple transaction and integration costs, 16 cents per share of amortization of intangible assets related to acquisitions and 11 cents per share related to reduction in income tax expense due to recognition of deferred income tax asset, the company said.

Kloet said significant progress had been made in the quarter to expand the group's product portfolio and broaden its customer base.

He said the integration of the Canadian Depository for Securities and Alpha Trading Systems continued to be an important focus. The company also recently concluded its acquisition of Equity Financial's transfer agency and corporate trust services business.