Post cost cutting-cutting plan, MONEX Group’s net loss remains as Q2 financial results announced

Japanese FX giant MONEX Group has today announced its full financial results for the entirety of its operations for the second quarter of the financial year ended March 31, 2015, which depict full details of the company’s struggle during what has been widely acknowledged as one of the lowest periods in terms of volatility for a number of years.

Last week, LeapRate reported that the company experienced a loss of 300 million yen ($2.7 million dollars), a figure which stands relatively unaltered in the full audited results which were announced today.

Within the official figures released today by MONEX Group, it is clear that the company’s US operations bore part of the responsibility for the loss, with a 1.58 billion yen ($14 million) negative figure for the period in terms of revenues as a result of business restructuring.

A large proportion of the restructuring amounted to IBFX having transferred its entire MetaTrader 4 buisness to FXCM Holdings LLC and consolidating all of its services into the firm’s proprietary Tradestation platform.

Despite the overall fiscal loss, MONEX maintains that due to a steady increase in customer assets and the number of accounts, TradeStation remains competitive. TradeStation regards its brokerage business primarily of equities as its core revenue source, and plans to increase option trading, which has high profitability and strong potential for growth.

Since October 2014 with the rise in market volatility, TradeStation’s customer activity has rapidly improved, thus rendering the losses made a matter to consider for the earlier part of 2014, with changing fortunes likely for next quarter.

In terms of global operations, MONEX intends to maintain 20% of commission revenue share among five major domestic brokers and invest heavily in expanding its B2B operation. Whilst embarking on expansion, MONEX Group considers its highly competitive equity brokerage business in Japan, the U.S. & China (H.K.) to continue serve as its core revenue stream.

MONEX Group intends to maintain a dividend payment to shareholders, with the pay out dividends in the amount to be determined by referencing the higher of 50% of dividend ratio of net income attributable to owners of the Company or 1% of annual DOE (dividend on equity) and flexibly buy back shares based on management judgment. However, year-end dividend for the financial year ending March 2015 is to be determined by referencing the higher of 50% of net income attributable to owners of the Company of 3Q and 4Q FYE or 1% of annual DOE (dividend on equity) Mar. 2015. Thus, interim dividend per share is based on 1% of annual DOE and amounts to 1.20 yen.

As far as actual revenues are concerned, the second quarter saw the company fare better than the first quarter of this financial year, with the period between April and June 2014 having finished with the company still in the black, however following a further three months of low volumes, a distinct loss was evident across all business units. Indeed, whilst operating revenue increased from 10.9 billion yen during the first quarter compared to in the second 12.1 billion yen in the second quarter of this financial year, net income attributable to owners of the Company declined from a small but still profitable 562 million yen in the first quarter, compared to a loss of 862 million yen in the second quarter.


For the full report from MONEX Group, click here.

Read Also: