ORIX Corporation — FY2024 Form 20-F
Reporting period: Fiscal year ended March 31, 2024, compared primarily with the year ended March 31, 2023. This is an annual report, not a standalone 2023 fourth-quarter filing. Financial statements use U.S. GAAP and Japanese yen; amounts below are yen billions unless noted. ORIX is a diversified financial services and investment group operating across Japan and international markets.
Key financial results and position
| Metric | FY2024 | Prior comparable period | Change |
|---|---|---|---|
| Total revenues | ¥2,814.4bn | ¥2,663.7bn | +6% |
| Operating income | ¥360.7bn | ¥335.9bn | +7% |
| Income before income taxes | ¥470.0bn | ¥392.2bn | +20% |
| Net income attributable to ORIX shareholders | ¥346.1bn | ¥290.3bn | +19% |
| Basic earnings per share | ¥298.55 | ¥245.98 | +21% |
| ROE / ROA | 9.2% / 2.19% | 8.5% / 1.96% | Both increased |
Operating margin was approximately 12.8% of revenue; net income attributable to shareholders was approximately 12.3% of revenue. Consolidated net income was ¥338.6bn; it differs from shareholder-attributable income because of noncontrolling interests, which recorded a net loss in FY2024.
- Cash flow: Operating activities provided ¥1,243.4bn; investing activities used ¥1,372.8bn; financing activities used ¥85.5bn. Cash, cash equivalents and restricted cash declined ¥181.6bn to ¥1,185.3bn.
- Assets and equity: Total assets rose 7% to ¥16,322.1bn; ORIX shareholders’ equity rose 11% to ¥3,941.5bn. The shareholders’ equity ratio increased to 24.1% from 23.2%.
- Debt and liquidity: Short- and long-term debt totaled ¥6,200.5bn, up 8%; deposits were ¥2,245.8bn, essentially unchanged. Debt-to-equity remained 1.6x. Committed credit facilities totaled ¥758.7bn, of which ¥559.3bn was unused.
- Funding costs: Interest expense rose 48% to ¥188.3bn. Average interest rates on domestic-currency debt and deposits increased to 0.4% from 0.3%; foreign-currency rates rose to 5.2% from 3.6%.
- Credit quality: Provision for credit losses increased to ¥21.0bn from ¥8.1bn. Non-performing lease and loan balances were ¥109.4bn, versus ¥98.9bn at the prior year-end; allowance for credit losses was ¥58.1bn, down from ¥65.4bn.
- Dividends: FY2024 dividend applicable to the fiscal year was ¥98.60 per share, with a 33.0% payout ratio. The report forecasts FY2025 dividends at the higher of a 39% payout ratio or ¥98.60 per share.
Material changes and segment performance
Segment profits increased 22% to ¥494.2bn. Banking and Credit rose to ¥96.7bn from ¥37.6bn, primarily reflecting gains on the partial sale of ORIX Credit. ORIX sold 66% of ORIX Credit to NTT Docomo in March 2024 and retained a 34% interest. PE Investment and Concession rose to ¥43.4bn from ¥2.8bn, supported by investee disposals and airport-related income. Real Estate, Insurance, and Aircraft and Ships also improved.
ORIX USA segment profit fell 65% to ¥17.3bn, reflecting lower securities and disposal gains amid weaker M&A activity and higher U.S. interest rates and credit costs. ORIX Europe profit declined 30% to ¥28.6bn, partly due to higher interest expense. Environment and Energy profit decreased 9% to ¥29.9bn, partly because prior-year investee-sale gains did not recur.
Other notable balance-sheet movements included investment in securities rising 14% to ¥3,263.1bn and investment in operating leases rising 22% to ¥1,868.6bn. Gross unrealized losses on available-for-sale debt securities increased to ¥391.8bn from ¥270.2bn.
Outlook, risks, contingencies, and unusual items
- Management described fiscal 2024 as a fluid environment, citing geopolitical tensions, high energy prices and U.S. and European interest rates, and China’s economic slowdown. It noted recovery in inbound tourism-related businesses, hotels, aircraft leasing, airport concessions and life insurance.
- Management expects continuing uncertainty in U.S. financial markets and says it is monitoring client and investment conditions, particularly in ORIX USA. The report provides no consolidated earnings or revenue forecast; the FY2025 dividend forecast is noted above.
- Principal risks include credit losses, funding availability and costs, interest-rate and foreign-exchange movements, securities and asset valuation volatility, acquisitions and investee performance, regulation and compliance, cybersecurity, and natural disasters. Climate transition risk includes exposure to coal-biomass co-fired power plants; the company also identifies renewable energy as an opportunity.
- Guarantees outstanding were ¥904.3bn, including ¥519.7bn related to U.S. agency loan programs. The report says there were no repurchase claims under those programs in FY2024. Separately, committed credit lines and other commercial commitments totaled ¥498.5bn; these are commitments, not necessarily funded liabilities.
- Management said ordinary-course litigation was not expected to have a material adverse effect, while noting that an adverse decision cannot be ruled out. The filing reports no unresolved SEC staff comments or defaults.
- FY2024 included ¥72.5bn of net gains on sales of subsidiaries and equity-method investments and liquidation losses, versus ¥33.0bn in FY2023; the ORIX Credit transaction was a major contributor. ORIX adopted the long-duration insurance accounting standard (LDTI), with retrospective transition adjustments, and reclassified certain equity-method investment presentation items.
- KPMG issued unqualified opinions on the consolidated financial statements and internal control over financial reporting. Critical audit matters included valuation of Level 3 investment funds and the DHC trade-name intangible asset.
Important facts for investors to verify
- How much of FY2024 profit growth came from recurring operations versus asset-sale gains, especially the ORIX Credit transaction and other divestitures.
- Whether higher funding costs and credit-loss provisions persist, and how credit quality develops in U.S. and overseas portfolios.
- The sensitivity of the ¥391.8bn unrealized loss position in available-for-sale debt securities to interest rates, credit spreads, and potential sales.
- Liquidity and refinancing resilience, including debt maturities, the use and availability of committed facilities, and funding costs across currencies.
- Assumptions supporting Level 3 valuations, insurance liabilities, and the DHC intangible asset, as well as the effects of LDTI and other presentation changes on comparability.
- Progress against the FY2025 dividend policy and sustainability goals, including emissions reduction and exposure to high-emitting industries.