Montreal Exchange Inc. announced today its financial results for the second quarter ended June 30, 2007, including a 7% increase in net earnings to $6.9 million from the same period of 2006.

Revenues for the second quarter 2007 amounted to $21.4 million, representing an increase of 3% compared to $20.7 million in the same period of 2006. This was due principally to a 1.6% increase in trading volumes in the quarter. For the six month period ended June 30, 2007, revenues grew 9% to $43.3 million, mainly because of a 13% increase in trading volumes from the same period of 2006.

“MX trading activity grew at a modest pace in the second quarter primarily because of the stable short-term interest rate environment,” said Luc Bertrand, president and CEO, in a release. “Trading in our short-term interest rate futures contract, the BAX, declined in the quarter and grew at a below average rate in the first half, largely due to monetary policy trends and a slowdown in market moving economic events. The quarterly decrease in BAX trading was partly offset by double-digit increases in volumes of our long-term interest rate futures contract, the CGB, as well as in MX’s equity index futures contract, the SXF.”

Expenses in the second quarter 2007 declined 4% to $12.9 million. The decrease in expenses was primarily attributable to lower amortization and lower computer licences and maintenance expenses. For the first half of 2007, expenses increased 5% to $28.3 million, mainly due to non-recurring fees related to the listing of MX shares on March 27, 2007. Expenses, excluding non-recurring items, increased 1% in the second quarter and remained flat in the first half compared with the same periods of 2006.

Net earnings in the second quarter 2007 increased 7% to reach $6.9 million, compared with $6.5 million in the second quarter 2006. Adjusted net earnings for the second quarter 2007 remained stable at $6.9 million. Adjusted diluted earnings per share were $0.22 in the quarter compared to $0.25 in the same period of last year. For the first six months of 2007, net earnings were up 10% to $12.5 million. Adjusted net earnings reached $14.5 million, an increase of 17% from the same period of 2006. Adjusted diluted earnings per share were $0.49 in the first half compared with $0.45 per share the previous year.

“MX’s business fundamentals and financial position are strong and we remain confident about the long-term growth potential of the Canadian derivatives market,” added Mr. Bertrand. “During the quarter, we also continued to pursue strategic initiatives, including today’s announcement that trading in the Montréal Climate Exchange (MCeX) carbon futures will be launched on the Montréal Exchange platform. I am also happy to report further progress in executing our plan to introduce energy trading products on the Canadian Resources Exchange, CAREX.”

Also today, the MX board of directors declared a special dividend of 35¢ per issued and outstanding common share of MX.

The MX and the Chicago Climate Exchange (CCX) announced today their plan to launch a MCeX carbon futures contract on the Montréal Exchange platform by the end of 2007, subject to regulatory approval.

MX and CCX decided to launch trading in futures products based on underlying Canadian emission credits after a careful assessment of the federal government’s air emissions policy and industry consultations. The MCeX partners are convinced that there will be growing demand for environmental derivatives. This is another step towards establishing the leading market for publicly traded environmental products in Canada.

MX also announced the appointment of Alain Miquelon as chief Financial officer and head of strategic development of the Montreal Exchange. Effective August 6, Miquelon will take on the strategic responsibilities of Philippe Loumeau, current senior executive vp and CSO, who has announced his departure at the end of this year. Miquelon will officially take over the responsibilities of CFO of the MX on October 1, replacing executive vp and CFO, Louise Laflamme. Laflamme will remain at MX to support the executive team and the President and CEO, until her planned retirement in June 2008.

Penny trading in options on nine Canadian equities and one equity index fund will be introduced on July 27, 2007 on the MX equity options market. This innovation, enabled by MX’s proprietary SOLA technology, permits trading in increments of a penny rather than a nickel. Earlier this year, the MX technology team introduced penny trading on the Boston Options Exchange (BOX), as part of a US pilot project, with positive results. BOX was recently named U.S. Options Exchange of the Year by FOW, the global derivatives magazine, in recognition of its role as an innovator in the options industry.