ORIX Corporation (NYSE:IX) Q4 2024 Earnings Call Transcript May 12, 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:

Hitomaro Yano: It’s time to begin the meeting. Thank you for joining us for this conference of ORIX Corporation’s for annual results for the consolidated fiscal year ended March 31, 2024. My name is Hitomaro Yano from Investor Relations and Sustainability Department. I will be the master of ceremony today. Thank you. The attendee at today’s conference is Mr. Inoue, member of the Board of Directors, Executive Officer, President and Chief Executive Officer and also Mr. Yamamoto, Operating Officer responsible for Investor Relations. As we begin, we would like to request all the participants to make sure that any mobile phone or other communication device is nearby would be either turned off or be a bit far away from the phone in order to prevent beep back.

We will first of all hear from Mr. Yamamoto and then for the representation by and explanation by Mr. Inoue and then Q&A session. The whole program should take approximately one hour. Mr. Yamamoto, the floor is yours.

Kazuki Yamamoto: I'm Kazuki Yamamoto, Operating Officer in charge of Corporate Planning and IR department. I'd like to make use of the deck in front of you to provide you with FY 2024 March end full year earnings briefing. So please turn to Page 2. So the right-hand side of the Page 2 shows or its record high profit for the year FY 2024 March end with net income of ￥346.1 billion, and this is a year-on-year increase of ￥55.8 billion, up 19%. ROE rose to 9.2%. Now quarterly trends in net income is shown on the right. Q4 net income was ￥126.9 billion. This is ORIX's highest quarterly net profit figure to date, even higher than the 2022 fiscal year March end when we sold Yayoi, the profit was posted by investment gains from the sales process taking over described an excess from the domestic PE investment.

Please turn to the 3 segment profit rose 22% year-over-year to ￥494.2 billion. As shown on the right-hand quarterly graph, FY 2024 March ended tail heavy in terms of exit as initially forecasted. In other words, we were able to maintain a consistent uptrend in base profits and investment gains over the fiscal year as a result. Next, please look at the full year graph on the left-hand side. Base profits were up 14% year-over-year to ￥367.6 billion, which also represents a new record high. Profit recovery in the facility operations and the concession business, thanks to higher inbound tourism as well as growth in investment income in the insurance segment were the main reasons behind growth in base profit. The likely investment gains were also up 54% year-over-year to ￥126.5 billion, while we have been maintaining an average of ￥100 billion over the past five years, thanks to ongoing capital recycling in our asset portfolio, including the real estate and domestic PE businesses and the portion of ORIX credit shares, we exceeded average this time with ￥126.5 billion of gain.