ORIX Corporation (NYSE:IX) Q3 2024 Earnings Call Transcript February 7, 2024

ORIX Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: We will now begin the financial results briefing of KDDI Corporation for the Third Quarter of Fiscal Year Ending March 2024. I am Nakoji [Phonetic] of Public Relations Department and will serve as the moderator today. This briefing will be held in this venue and also broadcast live on YouTube and other media. Three financial results related materials are posted on our KDDI IR website. For the attendees in the venue, please check your handout. Let me introduce the four participants today, Makoto Takahashi, President, Representative Director and CEO; Nanae Saishoji, Managing Executive Officer, CFO and Executive Director of Corporate Sector; Kenji Aketa, Executive Officer and Executive Director of Corporate Management Division; Shigeru Ezoe, General Manager of Accounting Department. President Takahashi, please.

Makoto Takahashi: It's time to start the meeting. Thank you for joining us for this conference of ORIX Corporation's for the Third Quarter Consolidated Financial Results for the nine months ended December 31, 2023. I'm the MC. My name is Nakane from IR Sustainability Department. Thank you for this opportunity. The attendee at this conference is Kazuki Yamamoto, Operating Officer responsible for Investor Relations. As we begin, we have a request for the participants. In order to avoid feedback, if you have a communication device such as mobile phone nearby, please make sure that it's turned off or it is away from the telephone. Yamamoto will provide the explanation followed by Q&A session and we will spend approximately one hour for this meeting. Mr. Yamamoto, please start.

Kazuki Yamamoto: Thank you for the introduction. Good afternoon and thank you for joining us for ORIX Group’s earnings despite of your busy schedule today. Thank you very much indeed. My .name is Kazuki Yamamoto, Head of Corporate Planning and Investor Relations at ORIX. I have taken over this role from my predecessor, Mr. Hitomaro Yano. Let me start with a brief explanation of Q3 FY24 March results. Please turn to page two for the executive summary. So there are three points that I would like to explain. The first is the third quarter net income. Net income came in at 91.1 billion yen, base profits rose in inbound tourism-related businesses, real estate, domestic PE investments and insurance allowing ORIX to post the second highest levels of those base profits and segment profits in the four years since the start of the pandemic.

Quarterly profits were the second highest after the year in which gains on the Yayoi exit was booked. The second is year-to-date net income for the nine month ending December 2023. Net income rose 3% year-over-year to 219.2 billion yen. As we discussed in the first half results briefing, we expected that most of the realization of capital gains would come in the latter half of FY24 March end. We're continuing to make steady progress in realizing this investment gains in numbers of deals which are currently under negotiation, which would allow us to attain a full year net income target of 330 billion yen, which was left unchanged. So the third point is shareholders return. In May of last year ORIX approved a share buyback program a 50 billion yen.

We have executed the full amount of the program and retired a total of 19.89 million shares. There are no changes to our dividend policy, which was announced back in May. Now please turn to the next page. Net income for the nine months ended December 2023 rose 3% year-over-year to 219.2 billion yen with annualized ROE for the same period coming in at 8%. The right hand chart shows trends in quarterly net income and ROE for the past four years. ORIX achieved its second highest ever quarterly net income since the start of the pandemic in the third quarter of 91.9 billion yen, an increase of 40% to QonQ. The ROE in that chart in annualized net income for each quarter, which improved to 9.7% in the third quarter. So we should be able to achieve the full year target so that we'll be able to achieve our target for the ROE for the year.

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