Monex Q1 Fiscal 2015: Global FX Revenue Halved, Total Revenue down 43% YoY

Monex Group's US business continues to be in the red, while YoY revenues from Japanese equities trading are taking a

monexlogoMonex Group has released its results for the first quarter of fiscal 2015, stating that total income has dropped by 43%, while net income numbers have shed a whopping 89% as reported in the preliminary figures released by the company more than a week ago. The result hardly comes as a big surprise, since most of the company’s business is in Japan, and one of the effects from the imploding stock and FX markets there during fiscal Q1 of 2014 have largely affected the year-on-year comparison.

Total revenue for the quarter came out at ¥10.9 billion ($106 million), which is lower by 9% over the final quarter of fiscal 2014. Quarterly income before taxes came out at ¥890 million ($8.6 million) which is lower by 52% over the last quarter, while net income is reported at ¥562 million ($5.47 million), dropping by 49% over the same period.

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TradeStation in the US Continues to Be in the Red

When broken down by region, the company’s revenue stream is sourced mainly from Japan (63%), followed by the US (36%) and China rounding the figures off with a mere 1%. Total Revenues during the quarter have dropped by about 12% in Japan and the US, with China shedding 5.9%. The US operation of the company TradeStation, is continuing to lose money with ¥601 million ($5.8 million) lost during the quarter, when compared to ¥513 during fiscal Q4 of 2014. The company has announced that it aims to bring it back to profitability by March 2015.

FX Trading Activity Weighing Further after a Weak Q4

The share of FX in total global revenues for the company amounts to 4% from customers in the US and 8% from those in Japan, totaling 12% from the whole. The bulk of revenues (almost 30%) comes from equity trading on the Japanese stock market.

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FX and fixed income revenues have shed ¥415 million ($4 million) during Q1 of fiscal 2015, with FX trading revenues decreasing by ¥339 million ($3.3 million) in Japan and ¥123 million ($1.2 million) in the US. When compared to a year ago the FX revenue declines are much bigger, amounting to ¥1.2 billion ($11.6 million) from Japan and ¥385 million ($3.7 million) from the US.

The biggest weighing factor on Monex Group’s business is decreased trading activity on the Japanese stock market which saw the average customer equity trading revenue dropping by 58%.

Business to Business Activities

After the launch of TradeStation in Korea on June 2nd, the firm is leveraging its technology to bring additional business from the Middle East, where it has concluded a license agreement with Mubasher. The English version of the platform has already been launched with an Arabic addition to come next year. In addition to that, the company announced that it is preparing a Chinese version of Tradestation, with a licensing agreement in its final stages.

Chinese Segment Still in the Red, but Monex BOOM Growing

According to the report, the Chinese brokerage business of the company, Monex BOOM, is in the black, however the overall Chinese segment is still in the red due to the initial costs associated with customer acquisition. The company has founded a joint venture in mainland China to develop a brokerage system with a broker in mainland China.

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