ORIX Corporation (IX) Q1 2023 Earnings Call Transcript

For the period ending June 30, 2022

August 3, 2022 3:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good evening, ladies and gentlemen. Thank you for joining this telephone conference of ORIX Corporation for the first quarter consolidated financial results for the three months period ended June 30, 2022. The attendee of today's conference is the Executive Officer, Head of Treasury and Accounting Headquarters, Mr. Yano.

As we begin, we have a request to you, in order to prevent the feedback, please make sure that you either turn off your mobile phone and other mobile devices or keep them away from the phone. If we experience severe feedback, we may just wrap the meeting with the consent of the organizer, in order to get in touch with the attendee who is causing the feedback.

Now, Mr. Yano will provide us with a presentation, and it will be followed by Q&A. We expect the whole duration of the meeting to last approximately one hour. We would like to start the meeting. Mr. Yano, the floor is yours.

Hitomaro Yano

Good afternoon. This is Hitomaro Yano, thank you all very much for joining us today. So without further ado, I'd like to start the presentation on first quarter, FY '23 March end results.

Now please turn to Page 2 for the executive summary. So I'd like to go through each and every executive summary point. As for the first point, the net income declined 5% year-over-year to ¥61.9 billion translating to annualized ROE of 7.5%. Profit growth in 5 segments out of 10 including Aircraft and Ships where passenger demand is improving in Asia and Australia which continues to perform well. And Energy and the Environment, which executed several large transactions last year.

Second, earnings were down year-on-year in some segments due to negative change in the market climate as ORIX USA, PE Investment gains declined and earnings in the Real Estate business were lower. At ORIX Europe AUM shrank due to the decline in equity markets. Within Japan ORIX Life saw an increase in COVID related payouts owing to a renewed surge in infections.

Third, I will discuss our ORIX's asset portfolio under current market conditions and a view on future investments. Macro indicators moved dramatically during first quarter, including global inflation, interest rate hikes by the U.S. FRB and rapid yen depreciation. Against this uncertain economic backdrop, the non-performing loan ratio for ORIX's assets has remained at a low level and credit losses and impairments have not increased.