ORIX(US:IX)2020-05-22 14:07Financial Data and Key Metrics Changes - The net income for FY 2020 was ¥302.7 billion, a decline of 6.5% year-on-year, but it met the target of ¥300 billion. The return on equity (ROE) was maintained at 10.3% [6][29]. - Pre-tax segment profits grew by 4.1% despite the decline in net income, indicating resilience in certain areas [6][29]. Business Line Data and Key Metrics Changes - Corporate Financial Services segment profits decreased by ¥10.9 billion year-on-year to ¥14.6 billion, impacted by reduced agency fee income [12]. - Maintenance Leasing segment profits fell by ¥5.1 billion year-on-year to ¥33.7 billion, despite solid auto lease profits [14]. - Real Estate segment profits dropped by ¥12.4 billion year-on-year to ¥76.9 billion, with gains from sales decreasing [16]. - Investment and Operation segment profits increased by ¥17.5 billion year-on-year to ¥55.7 billion, driven by gains on private equity investments [17]. - Retail segment profits decreased by ¥3.8 billion year-on-year to ¥80.4 billion, affected by market volatility and suppressed interest rates [20]. - Overseas business segment profits increased by ¥31 billion year-on-year to ¥156.4 billion, benefiting from new investments [21]. Market Data and Key Metrics Changes - The impact of COVID-19 resulted in a negative impact of approximately ¥15 billion to ¥20 billion before tax across various sectors, including energy, facility operations, and concessions [23][28]. - The occupancy rates for hotels and facilities dropped significantly due to decreased inbound traffic and domestic travel restrictions [25]. Company Strategy and Development Direction - The company has decided to refrain from disclosing short-term and mid-term directions due to uncertainties surrounding the COVID-19 pandemic [35][46]. - The focus remains on securing liquidity and managing investments conservatively until the macroeconomic conditions improve [36][38]. - The company anticipates that the post-COVID-19 environment may present new business opportunities, particularly in digitalization and AI [52]. Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the prolonged impact of COVID-19 on business performance, particularly in the real estate and aviation sectors [40][44]. - The company expects a gradual recovery in net profits, estimating a range of ¥180 billion to ¥200 billion if conditions improve by the end of Q3 [47]. - The management emphasized the importance of monitoring the situation closely and adapting strategies accordingly [49]. Other Important Information - The company executed a share repurchase program, repurchasing 34 million shares for a total of ¥55.8 billion, but noted that the benefits to shareholders may not be as expected due to the pandemic [31][32]. - The dividend payment for the fiscal year is set at ¥76 per share, with a payout ratio of 32% [30]. Q&A Session Summary Question: What kind of exposures does ORIX hold in the energy space? - ORIX USA has exposure to energy-related portfolios, with requests for rescheduling but no major negative impact anticipated [60][61]. Question: How do you see the risk increasing for the cost of provision from the second quarter and later? - The total amount of provision as of March end is less than ¥60 billion, and while it is expected to increase, no major negative impact on P&L is foreseen [63]. Question: What will be the subject for acquisition? Will it change in terms of the criteria? - The focus remains on infrastructure investments, particularly in solar power, with no major issues anticipated due to government payments [78]. Question: What are the conditions for you to deem that COVID-19 has been contained? - Containment is defined by the ability for people to travel and the resumption of operational business, with a focus on inbound traffic [90][92]. Question: What will be the prerequisite for base profit as well as investment gain? - The simulation for net profit assumes no new investments or divestments, with expected impacts from aircraft leasing and concessions [95].