ZENKOKU HOSHO (7164) Q2 2025 earnings summary

Executive summary

• Operating revenue for the six months ended September 30, 2024, rose 4.2% year-over-year to 22.1 billion yen, driven by new guarantees and M&A activity, while operating profit declined 3.6% to 14.9 billion yen and ordinary profit decreased 1.2% to 16.4 billion yen.

• Profit attributable to owners of parent was flat at 12.0 billion yen, up 0.1% year-over-year.

• Organic growth saw a 1.6% increase in the amount of new guarantees granted and a 1.0% rise in the number of new guarantees.

• Inorganic growth was significant, with 862.5 billion yen in new guarantee exposure acquired, mainly through M&As and ABLs.

• The company focused on expanding its core guarantee business, entering related businesses, and enhancing corporate value through growth investments and treasury share purchases.

Financial highlights

• Operating expenses increased 24.9% year-over-year, with credit-related expenses up 42.4% and provision for loss on guarantees up 30.0%.

• Non-operating income rose 29.2% due to asset management and ABLs.

• Extraordinary income included a gain on bargain purchase from M&As.

• Total assets at September 30, 2024, were 465.3 billion yen, nearly flat from the previous fiscal year.

• Net assets decreased 3.0% to 218.4 billion yen, mainly due to increased treasury shares.

Outlook and guidance

• No change in full-year earnings forecast; operating revenue expected to grow 7.9% to 55.7 billion yen, and profit attributable to owners of parent to rise 4.2% to 30.0 billion yen.

• Outstanding guarantee exposure projected to exceed 19 trillion yen by March 2025.

• EPS forecasted at ¥442.28, with a dividend per share of ¥197 and a total return ratio (including buybacks) of around 68%.

• Operating profit for the full year is forecast at 40.6 billion yen (up 3.8%), and ordinary profit at 43.2 billion yen (up 3.9%).