ORIX (IX) Q1 FY26 earnings call: guidance and Q&A

Inquired about the impact of US macroeconomic conditions, high interest rates, and potential Trump tariffs on ORIX USA's existing assets, renewable energy strategy, and overall US exposure.

Management acknowledged ORIX USA's struggles due to high interest rates and tariffs, leading to conservative asset reduction and focus on asset management. They stated direct exposure to Trump tariffs on renewable energy is limited, and the overall renewable energy strategy will not change, citing the Greenko/AM Green transaction as an example of flexible asset management.

“The fundamentals in the U.S., we don't consider this to be bad, but for ORIX U.S. business, to a certain extent, we need to take into consideration the possible capital recycling.”

asked by Koki Sato · answered by 山本 和樹

Asked about the full-year capital gain outlook given Q1's JPY 45 billion and Greenko's JPY 93.4 billion gain, and whether capital losses (impairments, credit losses, ORIX Life's unrealized bond losses) would be used for portfolio realignment.

Management confirmed the full-year capital gain budget is under review, considering optimal timing for exits and potential capital losses. They noted ORIX Life's bond portfolio unrealized losses have improved and are manageable due to the nature of their insurance products, with no major capital loss considerations currently.

“In terms of the capital gain, the optimal timing, we are taking stock and trying -- reviewing about the timing.”

asked by Masao Muraki · answered by 山本 和樹

Questioned if investment discipline changed given the termination of Panasonic projector business acquisition and Ascentech TOB not extending, and why ORIX Bank paid a JPY 30 billion dividend now.

Management stated the Panasonic deal was terminated by mutual agreement due to differing future business expectations and tariff impacts, reflecting disciplined investment. The Ascentech TOB didn't extend because the target price wasn't met, adhering to investment discipline. ORIX Bank paid the dividend to improve its segment ROE and contribute to group ROE, reflecting its strong financial soundness.

“we will not change our investment discipline just because we want to purchase.”

asked by Kazuki Watanabe · answered by 山本 和樹

Asked about internal discussions regarding shareholder return policy, especially share buybacks, given the Greenko sale providing more capital room.

Management stated that discussions on shareholder returns are ongoing, focusing on the market environment (e.g., Trump tariffs) and the group's business outlook. They reiterated flexibility for the JPY 100 billion buyback program, noting that major project visibility (Greenko, AM Green, Hilco) allows for decisions on capacity and timing for further buybacks if market conditions are favorable.

“if we consider that we have the capacity and as the market condition shows that if there is a -- capital market shows that it's a good timing to conduct share buybacks, if we make that type of decision, we will make a decision under -- after conducting discussions.”

asked by Naruhiko Sakamaki · answered by 山本 和樹

Asked about the drivers of Q1 base profit increase and its sustainability (above JPY 120 billion from Q2 onwards), and clarified the meaning of "full-year guidance under review" (positive, negative, or neutral implication).

Management stated Q1 base profit was solid, though included some technical/one-off bookings. They expect to maintain momentum of over JPY 100 billion base profit from Q2 onwards, despite potential fluctuations from diverse PE investees. The "under review" status for full-year guidance is neutral, indicating a thorough re-evaluation of the budget, including Greenko's sale, to provide a solid, revised forecast.

“it's not that things got better or worse. We are thinking that -- we are really looking into the budget so that we can say that this is the revised forecast backed by solid reasons.”

asked by Futoshi Sasaki · answered by 山本 和樹