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Earnings presentation7164ZENKOKU HOSHO Co.,Ltd.Financials (excluding banks)

Supplementary Materials to the Financial Results for the Fiscal Year Ending March 2026

For the fiscal year ended March 2026, operating revenue increased due to growth in the balance of guarantee obligations and other factors, while operating profit declined as credit-related expenses and other costs increased. For the fiscal year ending March 2027, the Company plans higher revenue and profit, based on continued growth in the balance of guarantee obligations and an expected slowdown in the pace of increase in credit-related expenses.

Worth reading
54Recurring
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Direction
Mixed performance
Direction inferred from the company’s description.
Scale
437
¥ million
Wording
Conditional
How definitive the wording is.

Contents of this document

Supplementary materials to the earnings reportFiscal year ending March 202612 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥58,739 million+3.1%
Operating profit¥41,382 million-1.4%
Ordinary income¥46,554 million+4.6%
Net income¥32,526 million+1.4%
Full-year earnings forecast
Operating revenue
¥60,600 million
Operating Expenses
¥18,600 million
Operating profit
¥42,000 million
Ordinary income
¥47,200 million
Profit attributable to owners of the parent
¥32,700 million
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Increase in operating revenue at 全国保証 on a non-consolidated basis+¥1.7 billion
  • Contribution from the three guarantee companies made subsidiaries during the fiscal year ended March 2025+¥1 billion
  • Increase in interest and dividend income+¥900 million
  • Equity-method income equivalent to gain on negative goodwill+¥1.1 billion
  • Decrease in fees paid on subordinated loans+¥600 million
  • Increase in credit-related expenses−¥1.4 billion
  • Other operating expenses−¥900 million
  • Absence of the gain on negative goodwill recognized in the fiscal year ended March 2025−¥1.2 billion
  • Income taxes and other items−¥300 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Guarantee Obligations Outstanding
    Actual results for the fiscal year ending March 2026¥21.4 trillion
    Forecast for the fiscal year ending March 2027¥22.5 trillion
    Year on year5.0%
  • New guarantee execution amount
    Actual results for the fiscal year ending March 2026¥1.9194 trillion
    Forecast for the fiscal year ending March 2027¥1.96 trillion
    Year on year2.1%
  • Subrogation payment amount
    Actual results for the fiscal year ending March 2026¥16.5 billion
    Forecast for the fiscal year ending March 2027¥17.0 billion
    Year on year2.8%
  • Collection of subrogation claims
    Actual results for the fiscal year ending March 2026¥10.5 billion
    Forecast for the fiscal year ending March 2027¥11 billion
    Year on year4.3%
New initiatives
  • Continuation of the support program for families raising children
  • Revision of product criteria and expansion of the group credit life insurance lineup
  • Provision of the Web application service (WSS) and My Page service (ZEWS)
  • Capital and business alliance with MFS and Intellex Holdings
  • Investments through CVC
Key KPIsA metric the company considers important as a management benchmark.
  • Guarantee Obligations Outstanding¥21.4 trillion
    Year on year against the same period last year+10.0%
  • New guarantee execution amount¥19,194 hundred million
    Year on year against the same period last year+7.3%
  • Number of new guarantees executed57,370 Engagements
  • Subrogation payment amount¥16,537 million
  • Subrogation payment rate0.09 %
    Year on year against the same period last yearAt approximately the same level as the previous year
  • Collection amount of subrogation claims¥10,545 million
  • Recovery rate from collateral disposals71.2 %
    Year on year against the same period last yearDown from 72.8% in the previous year
  • ROE13.4 %
    Year on year against the same period last yearDown from 13.8% in the previous year
Unit price and quantity metricsThese figures show sales broken down by price and volume.
The materials state that an increase in the average guarantee fee contributed to the increase in the new guarantee execution amount, but the fee itself is not disclosed. The number of new guarantees executed was 57,370.
Financial targets
ROE
Actual results13.4%
Target14%
Market Size / Share
  • Market for new residential mortgage lendingApproximately ¥21 trillion
    Company share9%
  • Market for outstanding private residential mortgage loansApproximately ¥210 trillion
    Company share10%
Number of stores and locations
End of period12 Location
Number of employees
Consolidated378 people
Standalone319 people
Annual Dividend
Fiscal year ending March 2026
Annual dividend per share¥120
Interim¥45
End of period¥75
Forecast for the fiscal year ending March 2027
Annual dividend per share¥123 per share
Interim¥50
End of period¥73
Payout ratio
49.2% for the fiscal year ended March 2026. The policy is to maintain a 50% payout ratio. Total payout ratio and DOE are not disclosed.
Acquisition of treasury shares
Acquisition amount¥6.9 billion
PeriodMay 2025 to September 2025
Contents of this document
ItemDetails
Document typeSupplementary materials to the earnings report
Fiscal Period CoveredFiscal year ending March 2026
Net Sales¥58,739 million (YoY +3.1%)
Operating profit¥41,382 million (YoY -1.4%)
Ordinary income¥46,554 million (YoY +4.6%)
Net income¥32,526 million (YoY +1.4%)
Full-year earnings forecastOperating revenue ¥60,600 million / Operating Expenses ¥18,600 million / Operating profit ¥42,000 million / Ordinary income ¥47,200 million / Profit attributable to owners of the parent ¥32,700 million
Breakdown of Factors Affecting the ChangeFactors Increase in operating revenue at 全国保証 on a non-consolidated basis / Amount +¥1.7 billion, Factors Contribution from the three guarantee companies made subsidiaries during the fiscal year ended March 2025 / Amount +¥1 billion, Factors Increase in interest and dividend income / Amount +¥900 million, Factors Equity-method income equivalent to gain on negative goodwill / Amount +¥1.1 billion, Factors Decrease in fees paid on subordinated loans / Amount +¥600 million, Factors Increase in credit-related expenses / Amount −¥1.4 billion, Factors Other operating expenses / Amount −¥900 million, Factors Absence of the gain on negative goodwill recognized in the fiscal year ended March 2025 / Amount −¥1.2 billion, Factors Income taxes and other items / Amount −¥300 million
Key KPIsIndicator name Guarantee Obligations Outstanding / Value ¥21.4 trillion / Year on year against the same period last year +10.0%, Indicator name New guarantee execution amount / Value ¥19,194 hundred million / Year on year against the same period last year +7.3%, Indicator name Number of new guarantees executed / Value 57,370 Engagements / Year on year against the same period last year Not disclosed, Indicator name Subrogation payment amount / Value ¥16,537 million / Year on year against the same period last year Not disclosed, Indicator name Subrogation payment rate / Value 0.09 % / Year on year against the same period last year At approximately the same level as the previous year, Indicator name Collection amount of subrogation claims / Value ¥10,545 million / Year on year against the same period last year Not disclosed, Indicator name Recovery rate from collateral disposals / Value 71.2 % / Year on year against the same period last year Down from 72.8% in the previous year, Indicator name ROE / Value 13.4 % / Year on year against the same period last year Down from 13.8% in the previous year
Unit price and quantity metricsThe materials state that an increase in the average guarantee fee contributed to the increase in the new guarantee execution amount, but the fee itself is not disclosed. The number of new guarantees executed was 57,370.
Number of stores and locationsEnd of period 12 Location / Number of store openings and closures during the period Not disclosed
Number of employeesConsolidated 378 people / Standalone 319 people / Changes during the period and hiring plan Not disclosed
Assumptions Underlying the Business OutlookItem Guarantee Obligations Outstanding / Actual results for the fiscal year ending March 2026 ¥21.4 trillion / Forecast for the fiscal year ending March 2027 ¥22.5 trillion / Year on year 5.0%, Item New guarantee execution amount / Actual results for the fiscal year ending March 2026 ¥1.9194 trillion / Forecast for the fiscal year ending March 2027 ¥1.96 trillion / Year on year 2.1%, Item Subrogation payment amount / Actual results for the fiscal year ending March 2026 ¥16.5 billion / Forecast for the fiscal year ending March 2027 ¥17.0 billion / Year on year 2.8%, Item Collection of subrogation claims / Actual results for the fiscal year ending March 2026 ¥10.5 billion / Forecast for the fiscal year ending March 2027 ¥11 billion / Year on year 4.3%
Financial targetsROE Actual results 13.4% / Target 14%
Annual DividendFiscal year ending March 2026 Annual dividend per share ¥120 / Interim ¥45 / End of period ¥75 / Forecast for the fiscal year ending March 2027 Annual dividend per share ¥123 per share / Interim ¥50 / End of period ¥73
Payout ratio49.2% for the fiscal year ended March 2026. The policy is to maintain a 50% payout ratio. Total payout ratio and DOE are not disclosed.
Acquisition of treasury sharesAcquisition amount ¥6.9 billion / Number of Shares Not disclosed / Period May 2025 to September 2025
Market Size / ShareItem Market for new residential mortgage lending / Value Approximately ¥21 trillion / Company share 9%, Item Market for outstanding private residential mortgage loans / Value Approximately ¥210 trillion / Company share 10%
New initiativesContinuation of the support program for families raising children, Revision of product criteria and expansion of the group credit life insurance lineup, Provision of the Web application service (WSS) and My Page service (ZEWS), Capital and business alliance with MFS and Intellex Holdings, Investments through CVC
Items this document does not state (12)
Gross Profit MarginOperating profit marginSelling, general and administrative expensesResults for the three months of the current quarterProgress against full-year forecastSelf-assessment against the planSegment resultsRisk amount incorporated into the outlookMedium-term management plan targetsCapital expendituresOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

For the fiscal year ended March 2026, factors contributing to profit growth included the steady performance of the balance of guarantee obligations at 全国保証 on a non-consolidated basis, contributions from the three guarantee companies made subsidiaries during the fiscal year ended March 2025, increases in interest and dividend income, and equity-method income equivalent to gain on negative goodwill. On the other hand, credit-related expenses, subsidiary expenses, expenses related to shareholder benefit programs, registration expenses associated with the merger, salaries, allowances and bonuses, and system-related expenses put downward pressure on profit. For the fiscal year ending March 2027, the Company plans higher revenue and profit, based on continued growth in the balance of guarantee obligations and an expected slowdown in the pace of increase in credit-related expenses.

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Supplementary Materials to the Financial Results for the Fiscal Year Ending March 2026 | ZENKOKU HOSHO Co.,Ltd. (7164) timely disclosure | Komori