INTL FCStone Inc, a firm that provides execution, risk management, advisory services, market intelligence and clearing services, announced its financial results this Tuesday for the second quarter of the 2018 fiscal year. The quarter, which ended on March 31st, saw the firm substantially increasing its year on year revenues.
Total revenues for the quarter increased to $6.51 billion, up from $5.46 billion in the previous year. The increase was primarily down to growth in commodities sales that rose from $5.27 billion in 2017 to $6.26 billion this year.
Fees from clearing services saw a more dramatic uptick, in percentage terms than commodities sales. They saw a year on year increase of $84 million to $97.2 million – not an insignificant amount of money by any means but very low when compared to commodities sales revenues.
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Increasing sales, increasing costs
The substantial increase in commodities sales also meant a considerable increase in commodities sales costs. INTL FCStone finished the second quarter of 2018 with $6.25 billion in commodities sales costs – a year on year increase of just under $1 billion.
Commodities sales costs left the firm with $260.20 million in revenue. Operating costs of $105.9 million and compensatory expenses of $124.80 million meant the firm finished the quarter with $29.50 million in pre-tax profit.
Income tax was equal to $6.80 million. This means the firm finished the quarter with $22.70 million in net profit – a 106 percent year on year increase.
Commenting on the figures, Sean M. O’Connor, CEO of INTL FCStone, said: “The return of volatility in some of our markets combined with higher short-term interest rates created a favorable operating environment for us, resulting in both record operating revenues and net income, with an annualized ROE of nearly 20%. All of our segments increased profitability over the prior year led by record performance in both our Commercial Hedging and CES segments”