LNG

Intercontinental Exchange, a leading global provider of energy trading platforms for futures and options and which is in the process of launching new LNG futures for Europe, reported strong third-quarter earnings.

Intercontinental Exchange, the leading operator of global energy derivative exchanges and clearing houses, reported an increase in first-quarter revenues as it continued to launch new products to meet customer demand, including most recently LNG freight futures and a range of Abu Dhabi oil futures and options.

ICE said in the quarter ended March 31, 2021, consolidated net revenues were $1.8 billion, up 15 percent year-over-year including exchange net revenues of $974M, fixed income and data services revenues of $468M and mortgage technology revenues of $355M.

Revenue from energy trading products dropped by 12 percent overall in the quarter after the winter peak to $310M from $353M in the same three months of $2020.

Exchanges operating income for the first quarter came to $653M and operating margin was 67 percent.

ICE, based in Atlanta, Georgia, launched its LNG freight futures contracts on March 23 based on price assessments from Spark Commodities with 30 lots traded on the first day.

First day trading included 15 lots of Spark30S Atlantic and 15 lots of Spark25S Pacific LNG freight futures contracts for the June 2021 contract expiry.

These first trades involved some of the LNG industry’s leading market participants including Total, Gunvor, Vitol, and Glencore, and were brokered by Clarksons, showing strong support for the new contracts.

ICE introduced the new LNG freight futures based on price assessments from Spark Commodities, a provider of technology-based solutions for promoting market liquidity.

Singapore-based Spark is backed by French data firm Kpler and EEX, part of the Deutsche Börse Group.

LNG and gas products

The ICE freight contracts form part of ICE's global natural gas complex alongside existing benchmark natural gas and LNG derivatives such as the Dutch TTF, the UK National Balancing Point, US Henry Hub, JKM LNG (Platts) and the West India Marker (WIM LNG) contracts.

“We are pleased to report strong first-quarter results that extend our track-record of growth. As we emerge from the Covid-19 pandemic, never have our digital networks proven more needed and resilient,” said Jeffrey C. Sprecher, ICE Chairman and Chief Executive.

“We are grateful to our customers that continue to rely on our technology, data and market infrastructure, and we remain focused on innovating across asset classes to drive greater efficiency and transparency,” declared Sprecher.

Adjusted net income attributable to ICE increased by 9 percent to $758M compared with $695M in the 2020 first quarter.

Free cash flow amounted to $702M versus $434M in the prior-year period.

At the end of the quarter on March 31, ICE launched its oil futures contract for LNG exporter Abu Dhabi and a total of 8,854 cleared lots were traded on the first day.

The start of trading of the ICE Murban Crude Oil Futures (IFAN) had been delayed from 2020 by the market oil market slump and Covid-19.

ICE Murban Crude Oil Futures opened for trading alongside 18 Murban-related cash settled derivatives and inter-commodity spreads, offering the market the broadest range of ways to trade and hedge Murban crude.

Market activity on ICE Futures Abu Dhabi on the first day of trading included 6,344 ICE Murban Crude Oil futures contracts and 2,510 Murban related cash settled derivative contracts.

A total of 27 firms traded on day one of the launch.

Intercontinental Exchange Inc., the US-based operator of regulated trading platforms for commodity and financial markets, reported multiple records in oil and natural gas futures trading as well as in its corporate earnings, giving it the “strongest quarter in the company’s history.”

ICE reported record revenues as daily volumes trading in energy futures and options surged during March in contracts such as the US benchmark West Texas Intermediate crude oil, North Sea Brent and natural gas.

The Atlanta, Georgia-based company recorded multiple records across the crude oil, natural gas and fuel product futures markets.

These derivatives are purchased and sold by parties such traders, oil and gas companies and utilities as hedges against rises and falls in physical resource prices.

Platform operator ICE reported that there were record futures and options trading across all types of financial derivatives.

Futures and options trading in the first quarter was up 45 percent year-on-year, driven by record volumes across all asset classes with average daily volume (ADV) records broken and energy trading up 54 percent, agri and metals up 31 percent and interest-rates instruments 28 percent higher.

The high volumes continued into April with energy open interest (OI) contracts still 23 percent higher versus 2019, including Brent crude up 27 percent, natural gas up 28 percent and other crude and refined products up 33 percent.

Despite the turmoil, ICE said that the New York Stock Exchange listed 15 initial public offerings during the first quarter, helping its customers raise over $7 billion in IPO proceeds.

For the quarter ended March 31, ICE said its consolidated net income was $650 million on $1.6 billion of revenues, less transaction-based expenses.

The revenues were 23 percent higher than in the first quarter of 2019.

“Amidst these highly uncertain times, we are grateful for both our customers’ business and their trust,” said Jeffrey C. Sprecher, ICE Chairman and Chief Executive.

“The dedication of our employees and our focus on leading technology is what provides the foundation for our global markets to operate smoothly in times of stress,” added the CEO.

“This combination enabled us to generate the strongest quarter in our company’s history, reporting record revenues and double-digit earnings per share growth,” explained Sprecher.

“As we look to the balance of the year, our focus remains on the safety of our employees, while also continuing to ensure that our markets, clearinghouses and related data services perform to the highest possible standards,” stated Specher.

Scott A. Hill, ICE Chief Financial Officer, said that in the first quarter the company recorded mutiple records, which enabled the firm to return over $850 to stockholders through its dividend and stock buyback program.

ICE’s data and listings revenues in the quarter were $676M and trading and clearing net revenues were $883M.

“This performance also enabled us to continue to invest in our business, ensuring we can continue to provide our customers with critical risk management tools while also creating value for our stockholders,” stated Hill.