Mitsubishi HC Capital (8593) investor relations material

Executive summary

• H1 net income attributable to owners fell 71.9% YoY to ¥24.9bn, mainly due to a ¥37.8bn European Energy A/S valuation loss and the absence of prior-year fiscal-period benefits.

• FY2027 net income guidance was cut ¥30.0bn to ¥130.0bn; other businesses were broadly on track and 2H earnings were expected as initially planned.

Financial highlights

• H1 revenue was ¥1,109.6bn, down 1.6% YoY; gross profit was ¥229.8bn, down 12.0%, and operating income was ¥93.8bn, down 27.8%.

• Recurring income was ¥91.9bn, down 25.9%; income before tax was ¥53.9bn versus ¥123.7bn, and EPS was ¥17.40 versus ¥61.85.

• Income gain rose ¥23.0bn YoY to ¥217.4bn, while asset-related gain/loss fell ¥15.9bn to ¥7.8bn.

• New transaction volume increased 11.9% YoY to ¥1,750.6bn.

Outlook and guidance

• FY2027 net income forecast was reduced from ¥160.0bn to ¥130.0bn; revised ROA and ROE guidance is 1.0% and 6.4%, versus prior forecasts of 1.2% and 8.0%.

• Annual dividend forecast remains ¥51 per share, up ¥5 YoY; the interim dividend was ¥25 per share, up ¥3 YoY.

• More than half of planned full-year asset-sale gains are expected in 2H; Real Estate gains and continued Aviation and Logistics strength are expected to partly offset the extraordinary loss.

• Revised FX assumptions are ¥158/$ and ¥215/£; a ¥1 yen depreciation is estimated to add ¥460mn of net income per USD and ¥110mn per GBP.