Transforming into a highly profitable business model focused on asset efficiency

「Specifically, we will pursue three growth strategies: “expanding the value chain,” “accelerating global expansion,” and “utilizing external capital.” At the same time, by optimizing the business portfolio, including the withdrawal from low-profitability businesses, we aim to maximize corporate value through the creation of social, economic, and human capital value.」

「At the end of the interim consolidated accounting period, total assets increased by ¥457.0 billion, or 7.1%, from the end of the previous fiscal year to ¥6,917.9 billion, while segment assets increased by ¥454.0 billion, or 7.9%, to ¥6,174.4 billion.」

「The main factor behind the decline in profit was the decrease in segment assets resulting from the promotion of portfolio management focused on asset efficiency and other measures. Segment assets decreased by ¥75.3 billion, or 5.8%, from the end of the previous fiscal year to ¥1,211.8 billion. The main reason for the decrease was the change of Orico Business Lease Co., Ltd. from a consolidated subsidiary to an equity-method affiliate.」

「The main factor behind the decline in profit was a decrease in standalone profit associated with the decline in segment assets resulting from the promotion of portfolio management focused on asset efficiency. Segment assets decreased by ¥13.3 billion, or 1.0%, from the end of the previous fiscal year to ¥1,273.8 billion.」

「Beginning in FY2023, the Company formulated a new five-year “Medium-Term Management Plan 2027.” Under the theme “Transform Ourselves and Create Change — TC Transformation and Sustainable Growth —,” it will promote the transformation to a portfolio with high profitability and stability.」

「Despite a decline in segment assets at overseas subsidiaries due to foreign exchange movements and restrictions on operating activities resulting from the COVID-19 pandemic, the Group accumulated investments in shares of affiliates, operating lease assets, and solar power generation equipment. Segment assets increased by ¥27.5 billion, or 0.6%, from the end of the previous fiscal year to ¥4,800.5 billion.」

「For the six months ended the second quarter of the current fiscal year, revenue increased by ¥42.452 billion, or 7.7%, year on year to ¥592.208 billion, while gross profit increased by ¥6.497 billion, or 6.8%, to ¥101.930 billion. The main factor was the inclusion of the results of Aviation Capital Group LLC, which became a consolidated subsidiary in December 2019 (hereinafter, “ACG”).」

「Specialty Business: Revenue increased by ¥25.333 billion, or 73.9%, year on year to ¥59.613 billion, while segment profit increased by ¥3.985 billion, or 35.5%, to ¥15.198 billion. The main factor behind the increase in profit was the inclusion of the results of ACG, which became a consolidated subsidiary in December 2019.」

「Since the merger in April 2009, the Group has focused on transforming its business from a model centered on finance, including finance leases and lending, and has expanded operating leases and asset investments focused on the added value of physical assets such as aircraft, automobiles, and real estate. To establish a robust business foundation for the next 10 years, the Group made Aviation Capital Group LLC, a major U.S. aircraft leasing company, a wholly owned subsidiary during the fiscal year as one such initiative, increasing the proportion of asset businesses in its overall portfolio.」

「The Company is focusing on transforming its business from a finance-centered model and is pursuing multifaceted global business development, with operating leases that leverage high asset value as its core business. This transaction is positioned as part of that strategy.」

「For the final year of the Third Medium-Term Management Plan, the fiscal year ended March 2019, the Group set management targets of consolidated ordinary profit of ¥80.0 billion or more, consolidated ROA (ordinary profit/operating assets) of 2.3% or more, and a consolidated equity ratio of 11.0%. Results for the fiscal year were consolidated ordinary profit of ¥86.3 billion (target achieved), consolidated ROA of 2.6% (target achieved), and a consolidated equity ratio of 10.4% (target not achieved).」

「While finance leases (lease receivables and lease investment assets) and installment receivables declined as a result of initiatives focused on improving asset efficiency, operating leases (rental assets) increased due to the expansion of the domestic auto business group companies and the consolidation of Shinko Real Estate as a subsidiary. Assets related to power generation businesses, primarily solar power generation, also increased under other operating assets.」

「While finance leases (lease receivables and lease investment assets) and installment receivables declined as a result of initiatives focused on improving asset efficiency, assets related to power generation businesses, primarily solar power generation, increased under other operating assets. Operating leases (rental assets) also increased, partly because the domestic auto business group companies continued to expand their operations.」

「Consolidated ordinary profit was ¥79.0 billion, consolidated ROA was 2.5%, and the consolidated equity ratio was 10.5%, representing steady progress toward achieving the targets for the final year.」

「In FY2017, the second year of the three-year Third Medium-Term Management Plan beginning in FY2016, the Group implemented the following measures to strengthen its operating and management foundations.」

「Consolidated ordinary profit: ¥68.0 billion, ¥73.5 billion, ¥76.0 billion, ¥80.0 billion or more / Consolidated ROA (ordinary profit/operating assets): 2.3%, 2.4%, —, 2.3% or more / Consolidated equity ratio: 9.6%, 9.9%, —, 11.0%」

「The Company formulated the three-year Third Medium-Term Management Plan beginning in FY2016 and launched initiatives to promote the transformation to a “highly profitable business model” focused on asset efficiency, with the aim of laying the foundation for further sustainable growth.」

「The Company formulated the three-year Third Medium-Term Management Plan beginning in FY2016 and launched initiatives to promote the transformation to a “highly profitable business model” focused on asset efficiency, with the aim of laying the foundation for further sustainable growth.」

「The Company formulated the three-year Third Medium-Term Management Plan beginning in FY2016 and launched initiatives to promote the transformation to a “highly profitable business model” focused on asset efficiency, with the aim of laying the foundation for further sustainable growth.」

「Basic policy of the Third Medium-Term Management Plan: “Promote the transformation to a ‘highly profitable business model’ focused on asset efficiency and lay the foundation for further sustainable growth.”」