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Earnings Presentation (for Analysts)

Earnings Presentation (for Analysts)Earnings Presentation (for Analysts)

Results in Fiscal 2018
Results in Fiscal 2017
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Videos, materials and other details for the latest and past earnings presentation

Earnings Presentation for 1st Quarter of FY 2018

Schedule

August 15, 2017

Venue

Otemachi 1st square

Presenter

Representative Director & Senior Managing Executive Officer Nobuiku Chiba
Director, Executive Officer & General Manager of General Accounting Department Taiji Hitachi
General Manager, PR & IR Division, Corporate Planning Department Hidehiko Honbu

Summary of Q&A session

There were no questions.
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Videos, materials and other details for the latest and past earnings presentation

Earnings Presentation for FY 2017

Schedule

May 15, 2017

Venue

Bellesalle Tokyo Nihombashi

Presenter

Representative Director, President & Chief Executive Officer Nobuyoshi Fujisawa
Representative Director & Senior Managing Executive Officer Nobuiku Chiba
Director, Executive Officer General Manager of General Taiji Hitachi
General Manager, PR & IR Division, Corporate Planning Department Hidehiko Honbu

Results in Fiscal 2017 (summary)

In fiscal 2017, operating revenue increased by 9.6 billion yen to 85.0 billion yen year-on-year on a consolidated basis, backed by better revenue in Domestic Financial Business, Financial Business in South Korea and Financial Business in Southeast Asia.
On the other hand, operating loss expanded by 1.6 billion yen to 5.7 billion yen, affected by: (i) unrealized loss of 3.4 billion yen on the option part of Group Lease’s convertible bonds in Investment Business; (ii) one-off allowance for doubtful accounts of 4.6 billion yen at Bank JTrust Indonesia to cope with the negative legacy of the past; and (iii) loss of 1.1 billion yen on eliminating the timing difference in account closing for the January–March 2017 period.

Operating profit by segment

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FY2016 FY2017
Domestic Financial Business 3.7 billion yen 4.6 billion yen
Financial Business in South Korea 0.2 billion yen 1.6 billion yen
Financial Business in Southeast Asia (7.8) billion yen (8.6) billion yen
Investment Business 2.5 billion yen (0.1) billion yen
Non-financial Business 0.0 billion yen 0.3 billion yen
Head office expenses/Other (2.7) billion yen (3.5) billion yen
Total (4.1) billion yen (5.7) billion yen

Domestic Financial Business

Operating profit increased by 0.9 billion yen to 4.6 billion yen. Both credit guarantee business and receivable collection business performed well. To be specific, the balance of guarantee grew steadily with a focus on Apartment Loan and the purchase of NPLs remained successful.

Financial Business in South Korea

Operating profit increased by 1.4 billion yen to 1.6 billion yen as a result of implementing our business strategies flexibly in light of the slowing economy in South Korea and the balance with profit levels. For example, we focused on building a quality portfolio through tighter credit screening rather than accumulating new loans proactively as in the past.

Financial Business in Southeast Asia

FY2017 reflected 15-month results because we eliminated a 3-month timing difference in account closing for this segment. Operating revenue increased by 5.5 billion yen, or 1.7 billion yen without the added 3-month portion. Operating loss expanded by 0.8 billion yen to 8.6 billion yen, affected by: (i) 4.6 billion yen in 2Q as one-off allowance for doubtful accounts regarding the negative legacy of the past; and (ii) 0.4 billion yen as the impact of goodwill for the 15-month period due to the eliminated the timing difference.

Investment Business

Operating profit decreased by 2.6 billion yen to operating loss of 0.1 billion yen, though we recorded proceeds of 1.4 billion yen from sales of the shares of Bank Mayapada in 1Q.

Non-financial Business

Operating profit increased by 0.3 billion yen to 0.3 billion yen, reflecting: (i) reduced operating loss in General Entertainment Business through continued cost-cutting efforts, despite rather weak sales; and (ii) better operating revenue and operating profit in Real Estate Business.

Summary of Q&A session

Summary of Q&A session at Earnings Presentation for FY2017 (HTML)
(Please click the text above. Details are displayed below.)

Q1 What is your stance on the balance between investments and shareholder returns?
A1 As our basic policy, we will pay dividends steadily while allocating free cash flow to our business expansion. We may consider a dividend increase depending on our performance.
Q2 Why do you think GL’s shares are still traded at lower prices?
A2 The suspended margin trading of GL’s shares may possibly be resumed from this day onward. Leaving aside how the share price moves, I believe the trading volume would increase.
Q3 Have you heard anything about possible impacts on GL’s business?
A3 GL’s market cap declined by as much as 200 billion yen due to the share price drop. Nevertheless, I understand that their business fundamentals remain intact.

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Earnings Presentation for the 3rd Quarter of FY 2017

Schedule

February 14 , 2017

Venue

Seminar Room, 6F
Tokyo Stock Exchange

Presenter

Representative Director & Senior Managing Executive Officer Nobuiku Chiba
Managing Director & Executive Officer Shigeyoshi Asano
Director & Executive Officer Taiji Hitachi
General Manager, PR & IR Division, Corporate Planning Department Hidehiko Honbu

Results of the third quarter of fiscal 2017 (summary)

In the third quarter of fiscal 2017, operating revenue increased by 7.3 billion yen (year-on-year) to 65.2 billion yen due to a large contribution from Investment Business. Meanwhile, operating profit rose by 5.4 billion yen to 3.3 billion yen. Major profit drivers included unrealized gain on Group Lease’s convertible bonds in Investment Business, despite the impact of allowance for doubtful accounts of 4.6 billion yen Financial Business in Southeast Asia booked in the previous quarter.

Operating profit by segment

Please scroll horizontally to see this figure.

Full-Year target 1Q-3Q
FY2017 results
Domestic Financial Business 4.2 billion yen 3.5 billion yen
Financial Business in South Korea 3.1 billion yen 1.1 billion yen
Financial Business in Southeast Asia (6.5) billion yen (6.5) billion yen
Investment Business 5.5 billion yen 7.7 billion yen
Non-financial Business 0.4 billion yen 0 billion yen
Head office expenses/Other (2.5) billion yen (2.5) billion yen
Consolidated Operating profit 4.2 billion yen 3.3 billion yen

Domestic Financial Business

Operating profit grew by 0.6 billion yen (year-on-year) to 3.5 billion yen. In credit guarantee business, the size of credit guarantee accumulated steadily by focusing on credit guarantee for Apartment Loan. Receivable collection business enjoyed successful purchase of NPLs. Both businesses performed well accordingly.

Financial Business in South Korea

Operating profit totaled 1.1 billion yen, an increase of 1.1 billion yen (year-on-year), despite the impact of allowance for doubtful accounts mainly due to seasonal factors. So far, we had aggressively expanded new loan disbursement. However, we strategically changed policies to expanding prime loan with medium and low interest rates, considering the balance with the worsening South Korean economy and profit levels.

Financial Business in Southeast Asia

We reported operating loss of 6.5 billion yen, a deterioration of 0.8 billion yen (year-on-year). The segment, however, is on the way to recovery excluding the impact of allowance for doubtful accounts of 4.6 billion yen recorded in the previous quarter. Net interest income showed solid growth with the successful expansion of operating assets by focusing on commercial loan*. *Commercial loan refers to a medium-sized (0.1-0.5 billion yen) loan.

Investment Business

We earned operating revenue of 1.4 billion yen by selling the shares of Bank Mayapada in the first quarter. Operating profit rose by 5.2 billion yen (year-on-year) to 7.7 billion yen. Unrealized gain on the derivatives component of Group Lease’s convertible bonds contributed substantially to operating profit, supported by the higher stock price.

Non-financial Business

ADORES Group delivered steady performance with consolidated operating profit of 0.6 billion yen. Due to development expenses at Highlights Entertainment, however, operating profit declined by 0.2 billion yen (year-on-year) to 0 billion yen. The launch of a new game machine by Highlights Entertainment in January 2017 is expected to contribute to segment earnings toward the end of fiscal 2017.

Summary of Q&A session

Summary of Q&A session at Earnings Presentation for the Third Quarter of FY 2017 (HTML)
(Please click the text above. Details are displayed below.)

Q1 I heard J Trust suspended Bitcoin exchange service “J-Bits.” Is it true? If so, is there any impact?
A1 The market condition has seen a significant change since we opened a Bitcoin exchange. For example, the amended Payment Services Act is to be enforced in April 2017.
We have decided to suspend our J-Bit service because making the business profitable requires considerable time due to the changing market condition.
Since investment returns are among our key management issues, we will allocate our management resources to more profitable segments. Meanwhile, we have been and will be working on FinTech development as a bank operator. With the involvement in the field, we have understood the block-chain structure, etc. Please note that the impact on our business results is insignificant.
Q2 Why are automobile loan and motorbike loan growing at Bank JTrust Indonesia, though they are decreasing in the Indonesian market?
A2 It is commercial loan that is increasing at Bank JTrust Indonesia. In contrast, major non-Indonesian banks tend to reduce it along with changing their portfolio mix. Since the Indonesian economy is growing as a whole, we believe that we can grow there by focusing on commercial loan.
For multi finance, our target is agricultural-related equipment, not motorbikes.
Q3 Please explain potential business environment risk.
A3 The domestic housing market is likely to shrink, considering that Japan is an aging society with fewer children. We will perform our credit screening for real estate-secured loan guaranteed by us more conservatively.
Other risk factors are country risk, political issues and economic problems. For Southeast Asia, we entered the market after contemplating such factors.
With regard to South Korea, public agency services could be suspended as a result of the presidential election every four years.
We avert such country risk by expanding business with risk diversification across several countries.
Q3 You mentioned that Indonesian business would be the main pillar for J Trust. I wonder if this will be achieved ahead of schedule.
A3 Indonesian business could have turned profitable earlier. In the second quarter, however, we eliminated all the assumed liabilities. Also, new loan assets are growing. We will make efforts to achieve profits in a shorter period of time.

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Earnings Presentation for the First Half of FY 2017

Schedule

November 14 , 2016

Venue

Bellesalle Tokyo Nihombashi

Presenter

Representative Director, President & Chief Executive Officer Nobuyoshi Fujisawa
Representative Director & Senior Managing Executive Officer Nobuiku Chiba
Director, Executive Officer General Manager of General Accounting epartment Taiji Hitachi
General Manager, PR & IR Division, Corporate Planning Department Hidehiko Honbu

Results of the second quarter of fiscal 2017 (summary)

In the second quarter of fiscal 2017, operating revenue increased by 2.4 billion yen to 40.1 billion yen year-on-year mainly due to investment returns.
On the other hand, operating loss declined by 1.6 billion yen to 3.9 billion due to a provision for bad debts in Financial Business in Southeast Asia and a valuation loss on convertible bonds held by us.
Meanwhile, we revised our full-year financial forecast. Major factors behind the change are: (i) negative goodwill and unrealized losses in Financial Business in South Korea; (ii) provision for bad debts in Financial Business in Southeast Asia from a conservative point of view; and (iii) estimated interest income and valuation gain on the convertible bonds in Investment Business. The revised operating profit is 4.2 billion yen.

Operating profit by segment

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Previous forecast Revised forecast 2Q FY2017 results
Domestic Financial Business 3.9 billion yen 4.2 billion yen 2.2 billion yen
Financial Business in South Korea 5.1 billion yen 3.1 billion yen 0.8 billion yen
Financial Business in Southeast Asia 0.3 billion yen (6.5) billion yen (6.0) billion yen
Investment Business 3.0 billion yen 5.5 billion yen 0.6 billion yen
Non-financial Business 1.3 billion yen 0.5 billion yen 0.1 billion yen
Other (2.3) billion yen (2.6) billion yen (1.6) billion yen
Total 11.2 billion yen 4.2 billion yen (3.9) billion yen

Domestic Financial Business

We recorded operating profit of 2.2 billion yen. The balance of credit guarantee exceeded the target and that of Apartment Loan showed steady growth. Besides, the purchase of NPLs remained successful. Thus, both credit guarantee and receivable collection businesses performed well.

Financial Business in South Korea

The average amount of new loan disbursed per month more than doubled year-on-year and the balance has been increasing steadily. The delinquency ratio also remained low. However, operating profit ended in 0.8 billion yen because negative goodwill posted in fiscal 2015 reduced operating profit under J-GAAP by 1.0 billion yen and TA Asset Management recorded unrealized losses.

Financial Business in Southeast Asia

Operating loss was 6.0 billion yen because we reserved against loan losses conservatively, despite better operating revenue. We posted restructuring expenses of 1.5 billion yen as extraordinary loss, aiming for a lean organization by streamlining the management. We will shut down 18 branches of Bank JTrust Indonesia, from 59 to 41, and almost halve the number of employees to 700. With these measures, we intend to reduce the fixed cost by 88 million yen per month.

Investment Business

Operating profit was 1.3 billion yen in the first quarter because we gained 1.4 billion yen mainly through sales of the shares of Bank Mayapada. On the other hand, operating revenue was 0.6 billion yen in the second quarter due to unrealized losses of 1.4 billion yen on Group Lease’s convertible bonds. As of the end of October 2016, however, the valuation loss improved by 2.4 billion yen. We expect operating profit to reach 5.5 billion yen on a full-year basis.

Non-financial Business

The ADORES group recorded consolidated operating profit of 0.5 billion yen, exhibiting its strong performance. However, operating profit was 0.1 billion yen in the second quarter, impacted by Highlights Entertainment’s development cost of 0.5 billion yen in the first half of fiscal 2017. Highlights Entertainment is ready for releasing a new product for the second half. The resultant sales growth will contribute to operating profit.

Summary of Q&A session

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http://www.jt-corp.co.jp/en/question/index.html

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Earnings Presentation for 1st Quarter of FY 2017

Schedule

August 17, 2016

Venue

Bellesalle Tokyo Nihombashi

Presenter

Representative Director & Senior Managing Executive Officer Nobuiku Chiba
Director, Executive Officer & General Manager of General Accounting Department Taiji Hitachi
General Manager, PR & IR Division, Corporate Planning Department Hidehiko Honbu

Overview of Business Results in the First Quarter of FY 2017

In the first quarter of fiscal 2017, operating revenue marked the highest level of 20.5 billion yen because Financial Business in Southeast Asia and Investment Business performed better year-on-year. Operating profit increased by 3.0 billion yen to 1.1 billion yen, reflecting stable performance in Domestic Financial Business as well as better profits in Financial Business in Southeast Asia and Investment Business.

Please scroll horizontally to see this figure.

Full-Year target 1Q FY2017 results Amount to achieve Achievement ratio
Domestic Financial Business 3.9 billion yen 1.1 billion yen 2.8 billion yen 28.2%
Financial Business in South Korea 5.1 billion yen 0.2 billion yen 4.9 billion yen 3.9%
Financial Business in Southeast Asia 0.3 billion yen (0.6) billion yen 0.9 billion yen -
Investment Business 3.0 billion yen 1.3 billion yen 1.7 billion yen 43.3%
Non-financial Business 1.3 billion yen (0.0) billion yen 1.3 billion yen -
Other (2.3) billion yen (0.9) billion yen - -
Total 11.3 billion yen 1.1 billion yen 10.2 billion yen 9.7%

Domestic Financial Business

Operating profit was 1.1 billion yen. In credit guarantee business, the amount of credit guarantee exceeded the target level corresponding to an increase in Apartment Loans. In receivable collection business, we continued successful purchase of NPLs.

Financial Business in South Korea

The loan balance showed steady growth. This is because the average balance of new loan disbursed per month almost doubled from the same period of FY2016. Meanwhile, delinquency ratio stayed low.
Operating profit was 0.2 billion yen due to a deduction of 0.6 billion yen in negative goodwill (originally booked in fiscal 2015) under J-GAAP and unfavorable foreign exchange rates. Without considering the impact of negative goodwill, operating profit was 0.8 billion yen. This endorses that the real earning power in this segment has grown in a steady manner.

Financial Business in Southeast Asia

Operating revenue increased by 0.3 billion yen to 3.5 billion yen because net interest income continued rising along with larger operating assets and higher average lending interest rates. Operating loss was 0.6 billion yen, which however improved by 1.9 billion yen primarily due to the reduced costs of fund.
With regard to GLFI, a joint venture with Group Lease, it had a head start by winning contracts immediately after launching operations in July 2016. On the other hand, we will strive to become profitable as soon as possible by further reducing fixed costs and enhancing operational efficiency.

Investment Business

We earned 1.4 billion yen by selling the shares of Bank Mayapada and booked operating profit of 1.3 billion yen. We expect further income of 0.8 billion yen by subscribing Group Lease’s convertible bond during fiscal 2017.
We exercised the right to convert Group Lease’s convertible bond into shares on December 30, 2015. The shares valued at 5.3 billion yen is now worth 10.3 billion yen as of the end of June 2016. The unrealized gain is about 5.0 billion yen. A further contribution to J Trust Group is expected.

Non-financial Business

In general entertainment business and real estate business, ADORES generally fared well on a consolidated basis. Due to prior expenses in general entertainment business outside the ADORES’ consolidation, however, operating profit was negative at 0.0 billion yen. Having said that, profits are likely to increase toward the end of fiscal 2017 in light of the nature of business.

Summary of Q&A session

Summary of Q&A session at Earnings Presentation for the First Quarter of FY 2017 (HTML)
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Q1 Regarding ordinary loss, please explain relevant non-operating items.
A1 We posted a foreign exchange loss of 1.5 billion yen.
To control risks, we diversify overseas group companies’ funds, which were affected by the yen’s sharp appreciation.
Q2 You may give some projections on Indonesian business results for 2Q FY2017 due to a timing difference in its account closing. Please inform as far as possible.
A2 Since the figures are yet to be audited, we would like to refrain from making any clear-cut comments. We are half way through becoming profitable and it may take more time.
Q3 Share buyback results on August 16 show that almost half of the maximum number of shares were not subscribed. Please tell me the company’s future buyback policies and how to use the obtained shares.
A3 The period in which we can execute share buyback is limited. We always seek opportunities and possibilities of share buyback to optimize our capital efficiencies.
We cancelled all the shares acquired last year. This time, however, we are considering various ways of utilization. We will announce optimal usage once decided.
Q4 Please show any updates on the planned introduction of IFRS.
A4 We changed our audit firm in FY2017 and is now undergoing an audit of our company structure and financial results. We are considering an early adoption and will make an announcement when approximate timing becomes clear.
Q5 Indonesia’s economic growth is likely to stagnate. Considering it and other factors, will Bank JTrust Indonesia’s Cost of Funds (COF) continue to decline?
A5 To our regret, Bank JTrust Indonesia’s brand awareness is weak and its COF is high compared with other local banks. Going forward, however, we will phase in our mass marketing strategies adopted in Japan and South Korea to raise the bank’s profile and reduce its COF from this year onward.
We expect net interest income to increase with the business expansion of PT Group Lease Finance Indonesia because the bank’s lending interest rates for Indonesian enterprises are high.
Q6 Do you expect a further rise in unrealized gain in Investment Business?
A6 We continuously seek investment opportunities targeting an IRR of at least 15%. Under our Medium-Term Business Plan, we aim to invest 50 to 100 billion yen during the three years. Going forward, we will continue to invest in deals which generate steady profits based on prudent judgments.
Q7 What is your projection of operating profit for 2Q FY2017?
A7 The Group as a whole is now capable of generating steady profits. We, however, need to attentively watch uncertainties of the Indonesian economy. A profit shortfall in our Indonesian business needs to be offset by other segments.
Q8 Please update your news release dated May 12, 2016 concerning a project of applying for the First Section of the Tokyo Stock Exchange.
A8 We are diligently making preparations for submitting an application within FY2017.
Q9 What are the future prospects about the receivable collection business?
A9 We foresee that the servicer market will shrink along with a decrease in the number of purchased receivables. In the meantime, we will ensure purchasing receivables with such means as purchases from retreating servicers.
Q10 Could you give us comments on the current status and future prospects about the maximum lending interest rates in South Korea?
A10 The maximum lending interest rates were lowered to 27.9% in 2016. Anticipating a further decline in the rates, we will take measures as soon as possible to dominate the markets capitalizing on what we have experienced in Japan.
Q11 Is there any difference in the effect on foreign exchange rates between J-GAAP and IFRS?
A11 We recognize that, except for a timing difference in account closing in Indonesia, the accounting concept shows no major difference between J-GAAP and IFRS.

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Earnings Presentation for FY2016

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Schedule Venue Materials
Fiscal year ended May 16, 2016 Bellesalle Tokyo Nihombashi
3Q February 15, 2016 Bellesalle Tokyo Nihombashi
First Half November 16, 2015 Seminar Room, 6F Tokyo Stock Exchange
1Q August 13, 2015 Bellesalle Tokyo Nihombashi

Earnings Presentation for FY2015

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Schedule Venue Materials
Fiscal year ended May 26, 2015 Seminar Room, 6F
Tokyo Stock Exchange
First Half November 25.2014 Seminar Room, 6F
Tokyo Stock Exchange

Earnings Presentation for FY2014

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Schedule Venue Materials
Fiscal year ended May 29,2014 Seminar Room, 6F
Tokyo Stock Exchange
First Half November 26, 2013 Seminar Room, 6F
Tokyo Stock Exchange

Earnings Presentation for FY2013

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Schedule Venue
Fiscal year ended May 28, 2013 First Seminar Room,
Tokyo Stock Exchange
First Half November 19, 2012 Seminar Room, 6F
Tokyo Stock Exchange

Earnings Presentation for FY2012

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Schedule Venue
Fiscal year ended May 21, 2012 Seminar Room, 6F
Tokyo Stock Exchange