Financial Results for Q3 of the Fiscal Year Ending March 31, 2025 (FY2025)
January 31, 2025
NEC Capital Solutions Limited
Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
Financial Results for Q3 of the Fiscal Year
Ending March 31, 2025 (FY2025)
- Financial Results for Q3 of FY2025
- Highlights of Financial Results
- Business Environment
- Financial Summary
- Revenues by Business Segment
- Business Results by Business Segment
- Leasing Business
- Finance Business
- Investment Business
- Operating Asset Balances
- Procuring Funds
- Credit Costs
- Forecasts for FY2025
© NEC Capital Solutions Limited 2024 | 2 |
1. Financial Results for Q3 of FY2025
© NEC Capital Solutions Limited 2024 | 3 |
1) Highlights of Financial Results
Business Environment
Total leasing contracts in the industry overall rose 11.1% Y/Y.
We need to continue to monitor future trends in the financing environment and bankruptcies.
Results in Key Business Units
In the Leasing Business, contracts executed rose Y/Y, though a decreased in new transactions. Both contracts executed and new transactions in the finance business decreased Y/Y.
Contracts executed : 28.2% up | New transactions : | 4.9% down |
Contracts executed : 4.6% down | New transactions : | 4.7% down |
Business Performance
Despite an increase in SG&A expenses and other costs, the increase in income from the core business and foreign exchange valuation led to a significant Y/Y increase in net income.
© NEC Capital Solutions Limited 2024 | 4 |
2) Business Environment
Total Leasing Contracts:
Total leasing contracts in the industry overall rose 11.1% Y/Y and rose by 16.7% Y/Y for our mainstay Information and communication equipment leasing.
Bankruptcies:
The total liabilities in Q3 FY2025 decreased Y/Y , but there was an increase in bankruptcies, particularly among SMEs.
Y/Y change in total leasing contracts | Bankruptcies (total liabilities/number of bankruptcies） |
(%) | ||||||||||||
40 | * By quarter | |||||||||||
30 | ||||||||||||
20 | Volume of leasing contracts | |||||||||||
10 | ||||||||||||
0 | ||||||||||||
-10 | ||||||||||||
-20 | Information and communication | |||||||||||
-30 | equipment | |||||||||||
-40 | ||||||||||||
21/3Q | 21/4Q | 22/1Q | 22/2Q | 22/3Q | 22/4Q | 23/1Q | 23/2Q | 23/3Q | 23/4Q | 24/1Q | 24/2Q | 24/3Q |
(Source: Lease statistics of the Japan Leasing Association)
(Billions of Yen) | (Number) |
2,500 | * By quarter | 5,000 | |
2,000 | Total liabilities | Number of | 4,000 |
(Left axis) | bankruptcies | ||
1,500 | （Right axis） | 3,000 | |
1,000 | 2,000 | ||
500 | 1,000 | ||
0 | 21/3Q 21/4Q 22/1Q 22/2Q 22/3Q 22/4Q 23/1Q 23/2Q 23/3Q 23/4Q 24/1Q 24/2Q 24/3Q | 0 | |
(Source: Bankruptcy information on the website of Teikoku Data Bank; liabilities of companies that filed for bankruptcy)
© NEC Capital Solutions Limited 2024 | 5 |
3) Financial Summary
Revenues: Revenues remained steady and maintained the same level of Y/Y.
Net Income: Despite an increase in SG&A expenses and other costs, the increase in income from the core business and foreign exchange valuation led to a significant Y/Y increase in net income.
Performance measures | Main Reasons for Y/Y Increase/Decrease in Net Income |
(Billions of Yen) | (Billions of Yen) |
FY2024 | FY2025 | |||
3Q | 3Q | Y/Y Change | ||
Revenues | 187.6 | 189.5 | +1.1% | |
Operating Income | 7.3 | 6.4 | -11.7% | |
Ordinary Income | 6.9 | 8.3 | +19.5% | |
Profit attributable to owners of parent | 3.5 | 5.9 | +69.0% | |
Net Income per Share (Yen) | 163.04 | 275.43 | － | |
Operating Asset Balance | 964.8 | 991.6 | +2.8% | |
Net Assets | 134.4 | 140.3 | +4.4% | |
Shareholders' Equity | 111.6 | 119.6 | +7.2% | |
Equity Ratio (%) | 10.7 | 10.9 | － | |
Dividend per share (Yen) | 130 | ※plan 150 | +20 |
Income taxes | |||||||
Credit costs | etc. | 5.9 | |||||
-0.2 | |||||||
Profit in | -0.2 | +1.9 | |||||
investment | -0.9 | ||||||
partnerships | +1.3 | ||||||
etc. | |||||||
3.5 | -0.2 | +0.3 | foreign exchange | ||||
Profit | valuation | ||||||
attributable to | |||||||
Gross profit | non- controlling | SG&A(Exclude | |||||
interests | credit costs) | ||||||
FY2024 3Q | FY2025 3Q |
© NEC Capital Solutions Limited 2024 | 6 |
4) Revenues by Business Segment
Revenues by Business Segment
(Billions of Yen) | ||||||
FY2024 | FY2025 | |||||
3Q | 3Q | Y/Y Change | ||||
Leasing | ||||||
Revenues | 169.4 | 170.6 | +0.7% | |||
Business | ||||||
Gross Profit | 12.1 | 12.1 | +0.1% | |||
Operating Income | 4.0 | 3.4 | -15.5% | |||
Finance | Revenues | 5.8 | 5.9 | +1.6% | ||
Business | ||||||
Gross Profit | 3.9 | 3.8 | -4.0% | |||
Operating Income | 1.6 | 2.2 | +42.0% | |||
Investme | Revenues | 10.0 | 10.4 | +3.9% | ||
nt | ||||||
Gross Profit | 5.1 | 5.1 | -0.2% | |||
Business | ||||||
Operating Income | 2.7 | 2.2 | -17.9% | |||
Other | Revenues | 2.5 | 2.8 | +14.6% | ||
Business | ||||||
Gross Profit | 1.3 | 1.3 | +2.8% | |||
Operating Income | 0.2 | 0.1 | -48.2% | |||
Total | Revenues | 187.6 | 189.5 | +1.1% | ||
Gross Profit | 22.4 | 22.2 | -0.8% | |||
Operating Income | 7.3 | 6.4 | -11.7% | |||
*Excluding adjustment amount |
Leasing Business
Although revenue grew, operating income decreased Y/Y due to an increase in SG&A expenses.
Finance Business
Not only did revenue and gross profit remain at the same level as the previous year; there was a significant Y/Y increase due to an improvement in credit costs.
Investment Business
Despite an increase in revenue due to the sale of real estate and an increase in debt collection, operating income decreased Y/Y due to the impact of the gain on bad debt reversal recorded in the same period of the previous year.
Other Business
Despite an increase in sales due to progress on healthcare and solar power initiatives, operating income decreased Y/Y due to an increase in SG&A expenses.
© NEC Capital Solutions Limited 2024 | 7 |
5) Business Results by Business Segment
Contracts Executed by Business Segment | New Transactions by Business Segment |
Contracts Executed by Business Segment
Contracts Executed increased due to growth in Leasing Business.
New Transactions by Business Segment
New transactions decreased Y/Y due to a decrease in the Leasing Business, which had won a large-scale project in the same period of the previous year.
© NEC Capital Solutions Limited 2024 | 8 |
6) Leasing Business
Contracts Executed by Customer Sector
(For ref.) Contracts Executed by Equipment Type
New Transactions by Customer Sector
Contracts Executed by Customer Sector
In the public sector, contracts executed rose Y/Y due to the acquisition of large project.
Private demand decreased Y/Y due to a decrease in the service and distribution industries.
New Transactions by Customer Sector
Public sector demand decreased Y/Y due to the impact of a large project won in the same period of the previous year.
Private sector decreased Y/Y due to a decrease in the service industry, etc., while manufacturing demand increased.
© NEC Capital Solutions Limited 2024 | 9 |
7) Finance Business
Contracts Executed by Form of Contract | Contracts Executed by Customer Sector |
Contracts Executed by Form of Contract
Contracts executed decreased Y/Y, mainly in Business Loans, due to a decrease in short-term contracts, etc.
Contracts Executed by Customer Sector
While contracts executed increased in manufacturing, they decreased in distribution, finance and insurance, etc., resulting in an overall decrease compared to the same period last year.
© NEC Capital Solutions Limited 2024 | 10 |