Nyse Euronext to cut stake in Qatar venture as Q1 profit slumps

Profits at the transatlantic exchange slipped to $104 million for the three months to the end of March, triggering a renewed focus on costs and a pledge to cut a further $100 million in expenses during the coming financial year.

The exchange cut $51 million in costs in the first quarter and reported $120 million in run-rate technology savings and a further $120 million in savings flowing from its acquisition of Amex.

Outlining the finances, Michael Geltzeiler, group EVP and CFO, Nyse Euronext, comments: "Based on our first quarter results and an accelerated company-wide focus on expense rationalisation efforts, we are increasing our cost savings guidance by an incremental $100 million to be realised in 2009."

Nyse Euronext suffered a 21% decline in Q1 net revenues to $604 million, from $767 million a year earlier, as volumes declined and it was forced to cut prices in a bid to reverse a decline in market share.

With the exchange trading landscape undergoing a significant transformation, the exchange has moved to restructure its previously announced partnership with the State of Qatar to build a new integrated cash and derivatives exchange in Doha.

Under the new proposals, Nyse Euronext says it will cut its proposed stake in the venture to 20% from 25%, lopping $50 million from its expected outlay. This will leave a bill of $200 million, payable in installments of $40 million over the next four years.