Nomura Holdings, Inc. (NMR) Q2 2023 Earnings Call Transcript

For the period ending September 30, 2023

November 2, 2022 5:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to today's Nomura Holdings Second Quarter Operating Results for Fiscal Year Ending March 2023 Conference Call. Please be reminded that today's conference call is being recorded at the request of the hosting company. [Operator Instructions] During the presentation, all the telephone lines are placed for listen-only mode. The question-and-answer session will be held, after the presentation.

Please note that this telephone conference contains certain forward-looking statements and other projected results, which involve known and unknown risks, delays, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievement of the company to be materially different from the results, performance or other expectations implied by those projections.

Such factors include economic and market conditions, political events and investor sentiment, liquidity of secondary markets, level and the volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of transactions.

With that, we would like to begin the conference. Mr. Takumi Kitamura, Chief Financial Officer. Please go ahead.

Takumi Kitamura

Good evening. This is Takumi Kitamura, CFO of Nomura Holdings. I'll now give you an overview of our financial results for the second quarter and first half of the fiscal year ending March 2023, using the document titled Consolidated Results of Operations.

Please turn to Page 2. Net revenue for the six months to September was JPY617 billion, a decline of 8% year-on-year. Income before income taxes was JPY43.2 billion, down 55% compared to last year. Net income declined 64% to JPY18.5 billion.

As shown on the bottom right, three segments income before income taxes was JPY49.7 billion. Market uncertainty continued during the six months period as the yen depreciated rapidly due to monetary tightening and widening of the interest rate differential between Japan and the U.S. and due to concerns of a recession.

Sentiment among retail clients worsened and slow sales of stocks and investment trusts meant flow revenues dropped significantly. Investment gain loss on investment management was negatively impacted by mark-to-market valuations of shareholdings due to worse market conditions and also because the same period last year included revenue contributions from an IPO of an investee company.

As a result, both divisions reported lower results compared to the same period last year. However, in both divisions, we are seeing progress in our efforts to increase assets over the medium to long term. Despite the market headwinds, retail recurring revenue and Investment Management business revenue both grew year-on-year.