Atlanta-based IntercontinentalExchange (ICE) saw its pretax profit plummet 62% to $19.9 million, its cash flow drop 47% to $27.1 million and its revenues tumble 25% to $93.7 million last year as the energy trading business struggled through a credit crisis and trading dropped sharply on its over-the-counter (OTC) electronic marketplace.

Nevertheless, ICE subsidiary International Petroleum Exchange (IPE) of London set volume records throughout the year, including achieving the best month in the history of the exchange in October, said CEO Jeffrey Sprecher. “The IPE ended the year with its sixth consecutive annual volume record, as credit conditions drove trading firms to move into the regulated futures markets and cleared OTC markets,” he said.

“The launch of the first continuous electronically traded oil futures contract by the IPE in October 2003 marked an important milestone for global energy trading and will be a key driver of our activities in 2004.”

Sprecher noted that the “continued contraction” among energy merchants in the United States resulted in significantly less participation in ICE’s OTC gas and power markets. But he said the clearing service ICE began to offer last year “was beneficial to a growing number of market participants who relied on clearing to ease credit constraints while managing risk.”

In the fourth quarter of 2003, ICE launched seven cleared financial power products. It currently offers 20 cleared OTC products, including an electronically traded U.S. natural gas options contract.

“ICE’s development of OTC cleared products has attracted new participants to the broader energy markets, including hedge funds, banks, proprietary trading firms and futures exchange locals,” Sprecher added. He said despite the sharp drop in the company’s financial results and the exit of multiple energy merchants from the business, participating companies logged into ICE actually grew by 8% in 2003.

©Copyright 2004 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.