ORIX CORP Q2 FY2025 earnings call

• Finance Category: ORIX Life Insurance contributed to earnings. Anticipates political instability, yen weakness, and geopolitical risks from U.S. elections. Slimmed down ORIX USA balance sheet. • Operation Category: Pretax profit rose 5.1% to ¥105.8 billion. Kansai Airport saw increase in foreign passengers; Umekita projects and MICE IR project in development. Environment and Energy segment acquired hydropower in Spain; asset management AUM grew to record high. • Investment Category: Pretax profit up 200% to ¥89.2 billion. Work on business succession, portfolio revisiting, and new investments. Aircraft and ship segments discussed, including Avolon's acquisitions and Santoku Senpaku's integration.

For the first 6 months of FY '25, ORIX recorded pretax profit of ¥257 billion. Segment profits were as follows: Finance category had a pretax profit of ¥92.8 billion, representing 47% of the full-year target; Operation category had a pretax profit of ¥105.8 billion, 44% of the full-year target; Investment category had a pretax profit of ¥89.2 billion, 48% of the full-year target. Total segment profit was ¥287.8 billion.

• Full-year net income target is ¥390 billion, with the first half achieving 46.9% progress. • Aim to achieve full-year ROE of 9.6%, with first half ROE at 9.3%. • Interim dividend is ¥62.17 per stock, a 45% increase from last year. • If full-year net income reaches ¥390 billion, annual dividend per share is expected to be ¥133.

• Political instability in Japan and U.S. presidential election leading to geopolitical uncertainty. • Yen weakness and potential resurgence of inflation due to U.S. rate cuts and stimulus. • Uncertainty in interest rates and foreign exchange rates. • Risks in ORIX USA's credit cards and real estate segments, including challenges from interest rate hikes.

Q: About the ¥390 billion full-year profit target, how confident are you?

A: Confident in achieving ¥390 billion, with pipeline of sales on schedule.

Q: Impact of U.S. presidential election on businesses?

A: Deal-by-deal impact, difficult to predict, but will assess on a case-by-case basis.

Q: ORIX USA's second quarter performance?

A: Real estate and private equity faced challenges due to interest rate hikes, but worst time may be over.

Q: Strategy to achieve higher ROE?

A: Consider M&A, divest low ROE businesses, and recycle capital.