ORIX Corporation (IX) Q2 2023 Earnings Call Transcript

For the period ending September 30, 2022

November 7, 2022 2:30 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 second quarter consolidated financial results for the 6 months period ended September 30, 2022. My name is [indiscernible] from IR and Sustainability Promotion. Today's attendees are Member of the Board of Directors, Representative Executive Officer, President and Chief Executive Officer, Mr. Inoue and Executive Officer, Head of Treasury and Accounting Headquarters, Mr. Yano.

We would like to ask that participants to keep your mobilephone and other communication devices either away from the telephone or on silent mode in order to prevent feedback. So we will hear from Mr. Yano and then to Mr. Inoue, followed by Q&A. The duration of the meeting is approximately 1 hour.

At this time, I would like to turn the call over to Mr. Yano.

Hitomaro Yano

Good afternoon. This is Hitomaro Yano, Head of Treasury & Accounting Headquarters of ORIX. Thank you for joining us in today’s meeting despite your busy schedule. Allow me to give you a brief overview of our FY '23 March end second quarter results. I will be making use of the PowerPoint slide in explaining our overview.

So please turn to Page 2 of the handout. Net income fell 17% year-over-year to ¥121.8 billion for the first half of FY ;23 March end. This translates to an annualized ROE of 7.4%. Please look at the right hand side chart that shows the quarterly trends of net income. Second quarter net income was ¥59.9 billion, which was down by just 3% quarter-on-quarter despite major changes in the macro economic conditions. As I explain later, the main reason for our lower profits versus the first quarter was an increase in COVID-19 related payouts for policyholders isolating at home in insurance segments

Please turn to the next page. Segment profits. This shows you the vector. Now segment profits for ¥170 billion. Please look at the right hand side chart that shows trends in segment profits from the prior year. Investment gains are indicated in pale blue, while based profits are indicated in the blue. Base profits in dark blue were down 18% year-over-year to ¥144.8 billion. This was primarily due to sharp declines in profit at three segments which performed very well last fiscal year, namely insurance ORIX USA and ORIX Europe the asset management business.