Sharemarket operator NZX is signalling a $19.9 million hit to its balance sheet from a carbon trading business it has sold, blaming a lower priority given to carbon trading and "lack of a global political agenda around carbon."
The reduction is to the valuation on its balance sheet for a prospective 2012 performance payment from the sale of its TZ1 Registry business last year. It will appear as a reduction in the gain on disposition of assets.
"Macro conditions have moved against carbon trading compared with where the world was when the registry business was sold," NZX said in a statement after the sharemarket closed.
"While some corporates – including key New Zealand companies -–continue to assign a high priority to environmental concerns, in general the lack of a global political agenda around carbon, coupled with the global financial crisis, has made such 'discretionary' expenditure a lot more contestable and scarce."
Falling industrial output had also reduced the corporate need for voluntary carbon issuance activity, which a carbon registry business revenue model depended on.
The TZ1 registry business continued to lead the field in customer acquisition worldwide. NZX remained confident around the long-term success of this business.
NZX said in July last year it was selling its TZ1 Registry business to global financial services company Markit overnight for $US37.1 million ($NZ26 million).