Overview of Earnings for Q3 FY2022
Explanation on Operating Results
During the consolidated cumulative third quarter (from April 1, 2022 to December 31, 2022), JPX Group recorded operating revenue of ¥100,529 million (decreased 0.1% from the same period of the previous fiscal year (i.e., year on year)), and operating expenses were ¥50,206 million (increased 10.2% year on year). As a result, JPX Group recorded operating income of ¥51,765 million (decreased 7.5% year on year) and income before income tax of ¥51,736 million (decreased 7.5% year on year).
In addition, net income attributable to owners of the parent company after tax was ¥35,175 million (decreased 7.5%
year on year).
Explanation on Financial Position
For assets and liabilities of JPX Group, “clearing business financial assets and liabilities” assumed by Japan Securities Clearing Corporation as a clearing organization and “deposits from clearing participants” deposited by clearing participants as collateral are included under both assets and liabilities. “Clearing business financial assets and liabilities” and “deposits from clearing participants” have a large impact on the amount of assets and liabilities of JPX Group due to their sizable amounts and daily fluctuations subject to changes in clearing participants’ positions.
In addition, “legal guarantee funds”, “trading participant security money”, and “default compensation reserve funds” based on the rules for securing safety of financial instruments transactions and other transactions are included under both assets and either liabilities or equity.
Total assets as of December 31, 2022 increased by ¥7,742,426 million from the end of the previous fiscal year to ¥79,205,861 million due mainly to an increase in “clearing business financial assets”. Excluding “clearing business financial assets”, “deposits from clearing participants”, “legal guarantee funds”, and “default compensation reserve funds”, assets decreased by ¥679 million from the end of the previous fiscal year to ¥386,489 million.
Total liabilities as of December 31, 2022 increased by ¥7,746,257 million from the end of the previous fiscal year to ¥78,885,839 million due mainly to the same increase in “clearing business financial liabilities”. Excluding “clearing business financial liabilities”, “deposits from clearing participants”, “legal guarantee funds”, and “trading participant security money”, liabilities increased by ¥3,130 million from the end of the previous fiscal year to ¥85,663 million.
Total equity as of December 31, 2022 decreased by ¥3,830 million from the end of the previous fiscal year to ¥320,021 million, due to a capital reduction as a result of dividend payment despite a capital increase from net income attributable to owners of the parent company. In addition, after excluding “default compensation reserve funds”, total equity as of the same date was ¥292,073 million.
Explanation on Forecast Information such as Consolidated Earnings Forecast, etc.
1) Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast from the forecast figures announced in the “Consolidated financial results for the fiscal year ended March 31, 2022 (Based on IFRS), unaudited” on April 26, 2022 (hereinafter “previously disclosed material”).
The consolidated earnings forecast for the year ending March 31, 2023 is based on the assumptions that the average daily trading values and volumes are ¥3.8 trillion for cash equities*, 32,000 contracts for 10-year JGB Futures transactions, 101,000 contracts for TOPIX Futures transactions, 186,000 contracts for Nikkei 225 Futures transactions**, and ¥24.5 billion for Nikkei 225 Options transactions***.
*The trading value of stocks listed on the TSE Prime, Standard, and Growth Markets and TOKYO PRO Market, and
that of ETFs, ETNs, and REITs, etc. (includes auction and off-auction trading)
**Includes Nikkei 225 mini contract volumes converted into large-sized contracts
***Excludes Nikkei 225 Weekly Options transactions
2) Dividend Forecast
The year-end dividend forecast for the fiscal year ended March 31, 2023 has been revised to ¥36 per share due to the decision to pay a commemorative dividend. The breakdown of the new year-end dividend forecast is an ordinary dividend of ¥26 plus a commemorative dividend of ¥10. For details, please refer to “Decision on Matters Regarding Acquisition of Own Shares (based on Provisions of the Articles of Incorporation Pursuant to Article 459, Paragraph 1 of the Companies Act) and Revision to Dividend Forecast” disclosed today.
JPX adopts a dividend policy with a target payout ratio of approximately 60% tied to business performance while giving due consideration to the importance of internal reserves for the following purposes:
－ Maintaining sound financial health as a financial instruments exchange group,
－ Preparing for risks as a clearing organization, and
－ Enabling JPX Group to pursue investment opportunities to raise the competitiveness of its markets as they arise.