Mitsubishi HC Capital : Consolidated Financial Highlights for the Year Ended March 31, 2023

Consolidated Financial Highlights for the Year Ended March 31, 2023

		[Based on J-GAAP]
			May 15, 2023
Company Name:	Mitsubishi HC Capital Inc.
Stock Exchange Listed on:	Tokyo (Prime Market), Nagoya (Premier Market)
Company Code:	8593	URL: https://www.mitsubishi-hc-capital.com/english/
Representative:	Taiju Hisai, Representative Director, President & CEO
For Inquiry:	Haruhiko Sato, Director, Managing Executive Officer TEL: [phone]
Date of General Meeting of Shareholder:		June 27, 2023
Scheduled Date of Submission of Securities Report:	June 27, 2023
Scheduled Commencement of Dividend Payment:	June 8, 2023
Supplemental Material for Financial Results:		Available
Holding of Financial Results Meeting:		Scheduled (for Institutional Investors and Analysts)

(Amounts of less than one million yen are rounded down)

1. Consolidated Results for the Fiscal Year Ended March 31, 2023 (April 1, 2022 - March 31, 2023)

(1) Consolidated Operating Results		(% represents the change from the same period in the previous fiscal year)
		Revenues		Operating income		Recurring income		Net income attributable to
					owners of the parent
For the fiscal year ended	(Millions of yen)		%	(Millions of yen)	%		(Millions of yen)		%		(Millions of yen)	%
March 31, 2023		1,896,231		7.4	138,727	21.6		146,076		24.6		116,241	16.9
March 31, 2022		1,765,559		86.3	114,092	83.1		117,239		80.5		99,401	79.7
(Note) 1. Comprehensive income:	For the year ended March 31, 2023:	¥265,136 million	51.9%
		For the year ended March 31, 2022:	¥174,586 million 229.0%

2. Mitsubishi HC Capital Inc. (the former Mitsubishi UFJ Lease & Finance Company Limited) executed the business integration with Hitachi Capital Corporation on April 1, 2021. The year-on-year percentage change for the year ended March 31, 2022 represents the comparison with the results of Mitsubishi UFJ Lease & Finance Company Limited.

	Earnings per share	Diluted	Return on equity	Recurring income	Operating margin
	earnings per share	to total assets
For the fiscal year ended	(Yen)	(Yen)	%	%	%
March 31, 2023	80.95	80.71	8.2	1.4	7.3
March 31, 2022	69.24	69.06	8.0	1.2	6.5

(Reference) Share of profit of entities accounted for using equity method: For the fiscal year ended March 31, 2023: ¥11,982 million For the fiscal year ended March 31, 2022: ¥4,818 million

(2) Consolidated Financial Position

Total assets

Total equity

Equity ratio

Equity per share

As of

(Millions of yen)

(Millions of yen)

％

(Yen)

March 31, 2023

10,726,196

1,551,029

14.3

1,064.46

March 31, 2022

10,328,872

1,333,467

12.7

912.19

(Reference) Shareholders' equity:

As of March 31, 2023:

¥1,528,773 million

As of March 31, 2022:

¥1,309,769 million

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at the end of the year

For the fiscal year ended

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

March 31, 2023

(30,347)

(127,322)

68,151

460,486

March 31, 2022

195,845

(107,879)

(192,157)

520,083

2. Dividends

Dividends per share

Total

Payout ratio

Dividends

1st Quarter

2nd Quarter

3rd Quarter

Fiscal

dividends

to equity

Annual

(Consolidated)

end

end

end

year - end

(For the year)

(consolidated)

For the fiscal year ended

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

(Millions of yen)

%

%

ended March 31, 2022

－

13.00

－

15.00

28.00

40,210

40.4

3.2

ended March 31, 2023

－

15.00

－

18.00

33.00

47,402

40.8

3.3

ending March 31, 2024

－

18.00

－

19.00

37.00

44.3

(Forecast)

(Note) The fiscal year-end dividend for the fiscal year ending March 31, 2023 is scheduled to be resolved at the Board of Directors meeting to be held on May 23, 2023.

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3. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 - March 31, 2024)

(Year-on-year change %)

	Net income attributable to	Earnings per share
	owners of the parent
	(Millions of yen)	%	(Yen)
Full year	120,000	3.2	83.55

• Notes
• 1. Significant changes in subsidiaries during the period

(Change of specific subsidiaries accompanying the change of scope of consolidation) : Yes

Excluded: Diamond Asset Finance Company Limited

(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions

(ⅰ) Changes in accounting policies with revision of accounting standards, etc.	:	Yes
(ⅱ) Changes in accounting policies other than (ⅰ) above	:	No
(ⅲ) Changes in accounting estimates	:	No
(ⅳ) Restatement of revisions	:	No
(3) Number of outstanding shares (common shares)

(ⅰ) Number of outstanding

shares (including treasury shares)

(ⅱ) Number of treasury shares

(ⅲ) Weighted average number of shares outstanding

As of March 31, 2023	1,466,912,244	shares	As of March 31, 2022	1,466,912,244	shares
As of March 31, 2023	30,718,231	shares	As of March 31, 2022	31,056,401	shares
For the year ended	1,436,042,105	shares	For the year ended	1,435,664,701	shares
March 31, 2023	March 31, 2022

(Reference) Summary of Non-Consolidated Results

1. Non-Consolidated Results for the Fiscal Year Ended March 31, 2023 (April 1, 2022 - March 31, 2023)

(1) Non-consolidated Operating Results									(Year-on-year change %)
	Revenues			Operating income	Recurring income		Net income
For the fiscal year ended	(Millions of yen)		%	(Millions of yen)	%	(Millions of yen)		%	(Millions of yen)	%
March 31, 2023	764,506		(8.8)		31,560	74.6	79,910		135.0		82,204	59.4
March 31, 2022	838,475		70.4		18,071	(20.6)	34,008		(44.6)		51,584	(18.6)
	Earnings per share		Diluted earnings per share
For the fiscal year ended				(Yen)			(Yen)
March 31, 2023			57.24			57.08
March 31, 2022			35.93			35.84

(Note) The year-on-year percentage change for the Year ended March 31, 2022 represents the comparison with the results of Mitsubishi UFJ Lease & Finance Company Limited.

(2) Non-consolidated Financial Position

	Total assets	Total Equity	Equity ratio	Equity per share
As of	(Millions of yen)	(Millions of yen)	%	(Yen)
March 31, 2023	5,317,966	881,212	16.5	612.09
March 31, 2022	5,700,025	880,601	15.4	612.00
(Reference) Shareholders' equity:	As of March 31, 2023:	¥879,074 million
	As of March 31, 2022:	¥878,739 million

• This "Consolidated Financial Highlights" is outside the scope of an audit by certified public accountants or an audit firm.
• Explanation regarding the appropriate use of the forecasts, etc. (Remarks on forward-looking statements)
  The forward-looking statements in this report, including financial forecast, have been prepared by using information available to Mitsubishi HC Capital Inc. ("Company" or "we") on the date of release and the certain assumptions deemed reasonable by the Company, and are not intended to assure that the Company will achieve such results. Actual earnings may differ significantly from the forecasts for various reasons.
• This "Consolidated Financial Highlights" is made in Japanese and translated into English. The Japanese text is the original and the English text is for reference purposes. If there is any conflict or inconsistency between these two texts, the Japanese text shall prevail.

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Contents

1. Summary of Operating Results, etc.	4
(1)	Summary of Operating Results for the Fiscal Year Ended March 31, 2023	4
(2)	Summary of Financial Position as of March 31, 2023	9
(3) Explanation on Future Forecast Information including Consolidated Financial Forecast	9
2. Basic Policy for Selection of Accounting Standards	9
3. Consolidated Financial Statements and Major Notes	10
(1)	Consolidated Balance Sheets	10
(2)	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income	12
	Consolidated Statements of Income	12
	Consolidated Statements of Comprehensive Income	13
(3)	Consolidated Statements of Changes in Equity	14
(4)	Consolidated Statements of Cash Flows	16
(5) Notes to the Consolidated Financial Statements	18
	(Notes concerning going-concern assumption)	18
	(Changes in accounting policies)	18
	(Segment information)	19
	(Per share information)	22
	(Significant subsequent events)	23

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1. Summary of Operating Results, etc.

1. Summary of Operating Results for the Fiscal Year Ended March 31, 2023

1. Overview of Financial Results, etc.

Net income attributable to owners of the parent for the fiscal year ended March 31, 2023 exceeded the financial forecast with a record-high ¥116.2 billion. Annual dividend per share is to increase by ¥2 from the forecast at the beginning of the fiscal year.

・Net income attributable to owners of the parent for the fiscal year ended March 31, 2023 increased by ¥16.8 billion, or 16.9% year on year, to a record-high ¥116.2 billion mainly thanks to 1) the profit contribution from CAI International, Inc., a marine container leasing company in the U.S.A. that became the Company's wholly- owned subsidiary in November 2021, 2) a decrease in credit costs, and 3) the business growth in the Americas in the Global Business segment.

・Net income attributable to owners of the parent for the fiscal year ended March 31, 2023 exceeded the financial forecast (net income attributable to owners of the parent of ¥110.0 billion) by ¥6.2 billion.

・As a result of exceeding the financial forecast, annual dividend per share is planned to be ¥33 (payout ratio: 40.8%), an increase by ¥2 from annual dividend forecast of ¥31 and by ¥5 from the annual dividend paid for the fiscal year ended March 31, 2022 of ¥28.

For the fiscal year ending March 31, 2024, net income attributable to owners of the parent is forecast to be ¥120.0 billion, and annual dividend per share is projected to be ¥37, an increase by ¥4 year on year.

・Net income attributable to owners of the parent for the fiscal year ending March 31, 2024 will see a limited year on year increase up to 120.0 billion yen, due to investments aiming to realize Our 10-year Vision and costs associated with restructuring and redefining existing businesses, in addition to the absence of a reduction effect in tax expenses recorded in the fiscal year ended March 31, 2023, while forecasting the growth of aviation business against the backdrop of the recovery of passenger demand.

・Annual dividend per share for the fiscal year ending March 31, 2024 is projected to be ¥37, an increase by ¥4 year on year (payout ratio of 44.3% on the premise of the financial forecast).

			(Billions of yen)
	Fiscal Year Ended	Fiscal Year Ended	Change (%)
	March 31, 2022	March 31, 2023
Revenues	1,765.5	1,896.2	7.4
Gross profit	334.6	357.3	6.8
Operating income	114.0	138.7	21.6
Recurring income	117.2	146.0	24.6
Net income attributable to	99.4	116.2	16.9
owners of the parent

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2) Major topics

Formulation and announcement of the Medium-term Management Plan for FY2023 - FY2025 ("2025 MTMP")

The Company formulated the Medium-term Management Plan covering the three-year period from the fiscal year ending March 31, 2024 to the fiscal year ending March 31, 2026 (the "2025 MTMP"), which was announced in May 2023. The 2025 MTMP is positioned as the "hop" plan of our three Medium-term Management Plans ("hop," "step," and "jump") toward Our 10-year Vision (Together we innovate, challenge and explore the frontiers of the future). We set the financial targets at FY2025 (the fiscal year ending March 31, 2026), the final fiscal year of the 2025 MTMP, as net income attributable to owners of the parent of ¥160.0 billion, ROA of approximately 1.5%, ROE of approximately 10%, and dividend payout ratio during the 2025 MTMP of 40% or higher. Net income attributable to owners of the parent is used in the calculations of ROA and ROE.

Please refer to "Medium-term Management Plan for FY2023 - FY2025 ("2025 MTMP")" posted on the Company's website for more details of the 2025 MTMP.

(URL of the Medium-term Management Plan on the Company's website)

https://www.mitsubishi-hc-capital.com/english/investors/managementplan/index.html

Establishment and announcement of the "Human Rights Policy"

In accordance with the United Nations "Guiding Principles on Business and Human Rights," we established the "Human Rights Policy" and announced it in October 2022. We will proactively and continuously conduct our business activities in consideration of internationally recognized standards related to human rights, in order to fulfill our responsibility to respect human rights as is expected of global companies, for achieving a society where human rights are respected.

Major business topics

May 2022: ・Announced the acquisition of partial stake of distributed solar power generation project in Massachusetts, U.S.A.

・Completed an eco-friendlymulti-tenants logistics facility "CPD Nagoya Minato".

Jul. 2022: ・Built a new solar power plant next to the Akita Tenbinno Wind Power Plant which was built in Akita city, Akita prefecture in September 2015 and started commercial operation as a wind and solar hybrid power plant.

・Invested in a newly established subsidiary of Mitsubishi Corporation, which undertakes the warehouse DX operations that have been developed by Mitsubishi Corporation.

Sep. 2022: ・Completed an eco-friendly logistics facility "CPD Nishiyodogawa".

Dec. 2022: ・Announced to conclude a capital and business alliance agreement with Connected Robotics Inc., engaging in research and development of robotics services designed for the food industry.

・Announced to transfer shares of Diamond Asset Finance Company Limited, a group company mainly operating the residential real estate-related finance, in order to concentrate resources on prioritized businesses in the Real Estate segment, and improve profitability in the segment (completed the transfer in March 2023).

Jan. 2023: ・ Commenced the business operation under the new management structure following the completion of the merger of CAI International, Inc. and Beacon Intermodal Leasing, LLC, operating the marine container leasing business.

・Announced to merge Mitsubishi HC Capital Energy Inc. and HGE Ltd., operating solar power generation business (completed the merger in April 2023).

Feb. 2023: ・Established an auto leasing joint venture in Thailand with ALD S.A., a global leading company in the auto leasing industry based in France.

・Announced to absorb and merge Japan Infrastructure Initiative Company Limited ("JII"), a group company making investments and providing loans in overseas infrastructure sector, after making JII a wholly-owned subsidiary on the premise that MUFG Bank, Ltd. would assign all of

JII shares it holds to the Company (completed the merger in April 2023).

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