Net income rose as INTL FCStone's revenues dropped during the quarter.
New York-headquartered INTL FCStone Inc., listed on the Nasdaq under ticker INTL, and operating a diverse set of financial services businesses catering to clients globally, has reported its fiscal 2016 second quarter (Q2) results for the three months that ended March 31, 2016, according to a company press release.
INTL FCStone’s total operating revenues were $3.7 billion yet 74% lower from over $14.4 billion compared to Q2 2015 year-over-year, while the company's cost of sales of physical commodities also decreased from $14.28 billion to $3.54 billion over the same period. Consequently, and after adjusting for costs related to clearing, interest, and IB expenses, the total net operating revenues were $112.9 billion, compared to $107.9 billion year-over-year.
From these totals, the company realized net income of $14.5 million, up 12% over the same period from last year, from across its various segments including financial products, advisory, and Execution services, among other business lines reported in its top-line figures. The news follows after Finance Magnates wrote about INTL FCStone's expanded credit facility announced earlier last quarter.
From the firm's clearing and executions services segment, operating revenues from INTL FCStone's customer prime brokerage product line had increased 14% to $5.7 million during Q2, up from $5 million during the same period a year ago, attributed to a 43% increase in foreign exchange volumes driven by higher market volatility.
OTC revenues decreased 42% to $16.8 million in the second quarter, primarily driven by lower customer volumes in Latin America as well the effect of low energy prices and volatility which drove a decline in energy and renewable fuels OTC revenues. Overall OTC volumes decreased 33%, particularly in agricultural commodities, while the average rate per contract declined 14% compared to the prior year.
Revenues from its exchange-traded activities were up 7% to $32.4 million in Q2 and driven by growth in agricultural commodity revenues including in the domestic grain markets and from the company’s London operations. The overall exchange-traded contract volume rose 18% while the average rate per contract decreased by 10% to $5.62, according to the update. The amount of average customer equity dipped to $941.9 million and was lower by 12% year-over-year.
An excerpt from the company's press release below depicts the volumes from related segments compared with prior periods.
OTC volumes dipped
Despite the dip in OTC volumes, the company reported that its operating revenues from its physical commodities business increased 23% to $7.9 million in Q2 , up from $6.4 million in the prior year period. In addition, precious metals operating revenues rose 28% to $5 million in Q2 compared to $3.9 million in Q2 2015.
INTL FCStone said its operating revenues in the precious metals segment had increased year-over-year despite a 43% decline in the number of ounces traded as spreads had widened in that segment and caused a 130% increase in the average revenue per ounce traded, according to the release.
In the firm's physical agriculture and energy segment, the operating revenues increased 16% to $2.9 million for Q2, compared YoY and driven by an increase in customer volumes in the feed ingredient industry.
Commenting in the company’s press release, INTL FCStone CEO Sean M. O’Connor said: “Our diversified business generated solid core operating results for the quarter which stands in strong contrast to the industry overall. A strong performance from our Securities segment was offset by a weaker performance in our Commercial Hedging segment. We saw a reversal of the immediately preceding quarter’s marked-to-market losses on investments held in our interest rate management program. For the six months to date we achieved an ROE of almost 12%, which we believe is a best in class performance, but still below our long term target of 15%."
An excerpt from the INTL FCStone 2016 fiscal year financials for Q2 can be seen below alongside prior periods.
New York-headquartered INTL FCStone Inc., listed on the Nasdaq under ticker INTL, and operating a diverse set of financial services businesses catering to clients globally, has reported its fiscal 2016 second quarter (Q2) results for the three months that ended March 31, 2016, according to a company press release.
INTL FCStone’s total operating revenues were $3.7 billion yet 74% lower from over $14.4 billion compared to Q2 2015 year-over-year, while the company's cost of sales of physical commodities also decreased from $14.28 billion to $3.54 billion over the same period. Consequently, and after adjusting for costs related to clearing, interest, and IB expenses, the total net operating revenues were $112.9 billion, compared to $107.9 billion year-over-year.
From these totals, the company realized net income of $14.5 million, up 12% over the same period from last year, from across its various segments including financial products, advisory, and Execution services, among other business lines reported in its top-line figures. The news follows after Finance Magnates wrote about INTL FCStone's expanded credit facility announced earlier last quarter.
From the firm's clearing and executions services segment, operating revenues from INTL FCStone's customer prime brokerage product line had increased 14% to $5.7 million during Q2, up from $5 million during the same period a year ago, attributed to a 43% increase in foreign exchange volumes driven by higher market volatility.
OTC revenues decreased 42% to $16.8 million in the second quarter, primarily driven by lower customer volumes in Latin America as well the effect of low energy prices and volatility which drove a decline in energy and renewable fuels OTC revenues. Overall OTC volumes decreased 33%, particularly in agricultural commodities, while the average rate per contract declined 14% compared to the prior year.
Revenues from its exchange-traded activities were up 7% to $32.4 million in Q2 and driven by growth in agricultural commodity revenues including in the domestic grain markets and from the company’s London operations. The overall exchange-traded contract volume rose 18% while the average rate per contract decreased by 10% to $5.62, according to the update. The amount of average customer equity dipped to $941.9 million and was lower by 12% year-over-year.
An excerpt from the company's press release below depicts the volumes from related segments compared with prior periods.
OTC volumes dipped
Despite the dip in OTC volumes, the company reported that its operating revenues from its physical commodities business increased 23% to $7.9 million in Q2 , up from $6.4 million in the prior year period. In addition, precious metals operating revenues rose 28% to $5 million in Q2 compared to $3.9 million in Q2 2015.
INTL FCStone said its operating revenues in the precious metals segment had increased year-over-year despite a 43% decline in the number of ounces traded as spreads had widened in that segment and caused a 130% increase in the average revenue per ounce traded, according to the release.
In the firm's physical agriculture and energy segment, the operating revenues increased 16% to $2.9 million for Q2, compared YoY and driven by an increase in customer volumes in the feed ingredient industry.
Commenting in the company’s press release, INTL FCStone CEO Sean M. O’Connor said: “Our diversified business generated solid core operating results for the quarter which stands in strong contrast to the industry overall. A strong performance from our Securities segment was offset by a weaker performance in our Commercial Hedging segment. We saw a reversal of the immediately preceding quarter’s marked-to-market losses on investments held in our interest rate management program. For the six months to date we achieved an ROE of almost 12%, which we believe is a best in class performance, but still below our long term target of 15%."
Institutional FX Demand Continues to Climb in April
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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