June 20, 2014 3:16 am JST

Nomura Research's operating profit holding steady on systems orders

TOKYO -- Nomura Research Institute is expected to post a group operating profit of just over 10 billion yen ($97 million) for the April-June term, staying roughly flat on the year.

     Sales will likely rise 5% to about 93 billion yen, an all-time high for an April-June quarter. Nomura Research is winning more business from insurers for systems development. It also received more orders from banks and brokerages for systems updates to accommodate changes in the tax structure.

     Cloud-based services for financial institutions that use Nomura Research's data centers are also growing. With Japanese companies boosting information technology investments amid earnings recoveries, systems development for manufacturers and retailers remains firm.

     But stock trading platforms proved a weak pocket. Nomura Research collects fees from brokerages according to trading value. Such income is almost entirely profit once it exceeds a certain level. However, because transactions are down more than 40% on the year, the income stream has been sluggish.

     For the full year through March 2015, sales are projected to climb 4% to 40 billion yen, with operating profit rising 6% to 53 billion yen. Nomura Research only advanced about 20% toward its full-year profit target in the first quarter, but is expected to keep its full-year forecast intact when it releases April-June results. The company is expected to win new development projects from insurers and other customers.

     Its corporate consulting service is also making strides, a business that tends to result in new systems development orders.