Monex Group Reports Dim Financial Results for Q4 and Fiscal 2017

Monex Group Inc today published its financial results for the fourth quarter and fiscal year ending on March 31 2017, showing a further decline in both revenues and profits explained a series of factors including declining trading volumes and costs associated with a new brokerage system which has affected the brokerage’s bottom line.

For FY 2017, Monex’s results showed a total operating revenue of $441 million (¥49.1 billion), revealing a further consecutive yearly decline of -10.6 percent year-on-year over FY 2016’s figures of $493 million (¥54.94 billion). Across a quarterly timetable, the figure yielded $101.7 million (¥11.33 billion) in Q4 2017, representing a slight drop of less than 1 percent year-over-year when compared with $102.3 million (¥11.39 billion) in the fourth quarter of the previous fiscal year.

Monex Group also reported a consolidated net profit of $1.44 million (¥161 million) for the year, representing a -95.0 loss when measured against a net profit of $31.6 million (¥3.5 billion) for the financial year ending March 31, 2016. Looking ahead for its quarterly figures, Monex’s Q4 2017 profits also came on a lower note, showing a net loss before taxes at -$925,624 (-¥103.0 million), relative to a profit of $3.2 million (¥355.0 million) during Q4 2016.

Business Highlights

Monex noted that its Japanese business segment recorded a profit of ¥255 million in the fourth quarter of 2017, which is a decrease of 64% QoQ, due to decrease in stock and FX trading volume and increase in costs for parallel operation of its backbone system.

In addition, the US segment made an increased profit of ¥69 million in the same quarter driven by increased equities and options trading volume, as well as continued improvement of net financial income. On an annual basis, US operations made profits for two consecutive quarters driven by controlling the fixed-type costs since Q2. However, this segment’s yearly loss of ¥457 million was due to the second quarter loss.

In terms of its Asia-Pacific segment, the business’ brokerage commission increased by 27% QoQ at Monex Boom Securities and turned black in operating income. However, this segment yielded a loss of ¥39 million in Q4 2017 due to equity in losses of an equity method investment in a joint venture in mainland China.

Finally, the company explained that the declines can in part be explained by the lower risk appetite of retail investors on the back of structural changes in the Japanese stock market. The brokerage has recognized the necessity to rebuild the group’s business portfolio in the mid- and long-term.

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