Nomura Holdings Inc Adr ((NMR)) has held its Q1 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Nomura Holdings Inc. recently held its earnings call, revealing a robust performance with notable revenue growth across its divisions. The company reported record income before taxes and significant achievements in asset management. However, challenges such as illegal trading impacts and declines in certain revenue streams were also highlighted, indicating areas that require attention.
Strong Revenue Growth
Nomura Holdings Inc. reported a 16% increase in group net revenue, reaching JPY523.3 billion. This growth was consistent across all divisions, showcasing a strong performance in both revenue and profit.
Record Income Before Taxes
The company achieved a 64% increase in income before income taxes, amounting to JPY160.3 billion. This was significantly aided by the sale of fixed assets by Nomura Properties, marking a record achievement for the firm.
Asset Management Achievements
Assets under management reached a record high of JPY94.3 trillion, driven by market recovery and net inflows of approximately JPY108 billion. This highlights the company’s strong position in asset management.
Banking Division Growth
The newly established banking division reported a 12% rise in net revenue to JPY12.8 billion, with income before income taxes increasing by 19%. This growth underscores the successful launch and performance of the new division.
Improvement in Investment Gains
Investment gains saw a sharp improvement, with gains reaching JPY9.9 billion. This reflects better performance in American Century Investments and Nomura Capital Partners.
Illegal Trading Impact
The company faced a JPY6.6 billion expense related to compensation for losses from illegal trades due to phishing scams, impacting other expenses and highlighting the need for enhanced security measures.
Decline in Investment Banking Revenue
Investment banking revenues fell by 27% from the previous quarter, though it remained the highest for Q1 since FY2016/17. This decline points to challenges in the investment banking sector.
Equities Revenue Drop
Equities net revenue decreased by 3% to JPY98.3 billion, with a decline in execution services revenue following a strong previous quarter.
Outflows in Investment Trust Business
ETFs experienced outflows of approximately JPY670 billion, attributed to individual investor actions and profit-taking, indicating a shift in investor behavior.
Challenges in EMEA
The EMEA region faced losses due to a weak laser digital business and increased personnel costs stemming from European compensation regulations.
Forward-Looking Guidance
Looking ahead, Nomura Holdings remains optimistic, with a 16% increase in group net revenue and a 64% rise in income before income taxes. The company achieved an EPS of JPY34.04 and an annualized ROE of 12%. Despite market volatility, the firm expects continued growth across its divisions, including the newly established banking division. The company is also taking steps to improve security measures following the phishing scams.
In conclusion, Nomura Holdings Inc.’s earnings call highlighted a strong overall performance with significant growth in revenue and profits. While challenges such as illegal trading impacts and revenue declines in certain areas were noted, the company’s forward-looking guidance remains positive, with expectations of continued growth and improvements in security measures.