Nomura Holdings Inc Adr ((NMR)) has held its Q4 earnings call. Read on for the main highlights of the call.
Nomura Holdings Inc. Reports Record Performance Amidst Revenue Challenges
Nomura Holdings Inc. recently held its earnings call, revealing a strong overall performance for the fiscal year. The company achieved record net income and significant growth in key segments such as Wealth Management and Investment Management. Despite these successes, the call also highlighted quarterly declines in revenue and challenges in fixed income revenues, indicating some volatility and uncertainty. However, Nomura’s strategic focus on dividends, share buybacks, and international profitability suggests a positive outlook for the future.
Record-High Net Income
Nomura Holdings reported a record-high net income, which increased to 2.1 times the year-earlier level, reaching 340.7 billion yen. This achievement underscores the company’s robust financial performance over the fiscal year.
Strong Segment Performance
All three main segments of Nomura Holdings performed solidly, with segment income before income taxes growing by 80% to 426.6 billion yen. This growth reflects the company’s ability to capitalize on market opportunities and manage its operations effectively.
Wealth Management Growth
Wealth Management saw a 30% growth in recurring revenue, with a continued net inflow into recurring revenue assets. This indicates strong client trust and a successful strategy in expanding the wealth management business.
Investment Management Revenue Increase
Investment Management experienced a 20% increase in business revenue, marking the eighth consecutive quarter of net inflows. This consistent growth highlights the division’s strong market position and effective management strategies.
International Profitability
Profitability improved sharply in international regions, achieving the highest income before income taxes since 2003. This improvement reflects Nomura’s successful expansion and operational efficiency in global markets.
Dividend and Share Buyback
Nomura declared a total year-end dividend of 34 yen per share and announced plans for a share buyback of 100 million shares, or 60 billion yen. These moves demonstrate the company’s commitment to returning value to shareholders.
Quarterly Revenue Decline
Despite the annual successes, Nomura faced a 10% decline in group net revenue quarter-on-quarter, falling to 452.7 billion yen, and a 29% drop in income before income taxes to 97.7 billion yen. This decline points to some short-term challenges in maintaining revenue momentum.
Fixed Income Revenue Weakness
Fixed Income revenues saw a 24% decline to 105.8 billion yen, attributed partly to spread widening and decreased client activity. This segment’s performance highlights the volatility and challenges in the fixed income market.
Challenges in Wealth Management Flow Revenue
Wealth Management flow revenue fell 20% to 52.9 billion yen, with declines in primary stock subscriptions and investment trust purchases. This indicates potential areas for improvement in client engagement and product offerings.
IT Expenditure Increase
IT expenditure increased in the fourth quarter, contributing to higher costs. However, this level of spending is not expected to continue, suggesting a temporary spike rather than a long-term trend.
Forward-Looking Guidance
Looking ahead, Nomura Holdings provided optimistic guidance based on its recent performance. The Group’s net revenue for the fiscal year increased by 21% year-on-year, reaching 1,892.5 billion yen, while income before income taxes surged by 72% to 472 billion yen. With a record-high net income of 340.7 billion yen and a return on equity of 10%, Nomura’s outlook remains positive. The company announced an ordinary dividend of 24 yen per share, supplemented by a 10 yen commemorative dividend, and initiated a share buyback program, reflecting confidence in sustained growth.
In conclusion, Nomura Holdings Inc.’s earnings call painted a picture of a company achieving record performance amidst some revenue challenges. The overall sentiment was positive, with strong growth in key segments and strategic initiatives aimed at enhancing shareholder value. As Nomura navigates the complexities of the financial markets, its focus on profitability and shareholder returns positions it well for future success.