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GMO Internet announces a decrease in sales and an increase in profit for its crypto businesses

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GMO Internet, Inc., a major Japanese internet-related services company announced its business results for FY2019 (January–December 2019) on February 12. Cumulative sales grew to \196.17 billion, an increase of 5.9% year on year, and operating income was \25.27 billion, an increase of 16% year on year. GMO Internet’s subsidiary GMO Coin, Inc. also reported an increase in operating income in its cryptocurrency exchange business and mining business.

GMO Coin returned to profitability after being \1.36 billion in the red in the previous fiscal period. Although the company had net sales of \6.07 billion, down 26.4% from last year’s \8.24 billion, it also reported \958 million in operating income.

In the mining business, the amount of Bitcoin (BTC) mined by GMO Coin decreased due to a temporary drop in the company’s own hash rate, leading to a significant decline in net sales, down 49.1% year on year. However, operating income returned to the black due to the effects of cost reductions carried out in the restructuring of the business.

Moreover, the cryptocurrency exchange business was impacted by the early adoption of self-regulating rules by Japan’s Virtual Currency Exchange Association. The JVCEA has made it a requirement to reduce leverage in margin trading before the end of July 2020, leading net sales to decrease to by 2.6% year on year. On the other hand, the number of registered trade accounts on the cryptocurrency exchange service has continued to expand to 299,000 accounts, up 32.8% year on year.

GMO Coin has also stated that it will prioritize building a new base for the mining business going forward, and proceed with transferring the system for business operations so that electricity can be used at a lower cost.

In the medium to long term, GMO Coin is committed to a low-cost mining strategy and it plans to expand its domestic share in the cryptocurrency exchange business by using its knowledge of FX. In other initiatives, the company plans to issue stablecoins tied to the Japanese yen.



OhNoCrypto

via https://www.ohnocrypto.com

Masayuki Tashiro, Khareem Sudlow