The Outline of the Consolidated Financial Results for Fiscal Year ended March 2010
At the consolidated financial results for the fiscal year ended March 2010, operating revenue was 278,795 million yen, down 14.1% year-on-year. This was attributable to a decrease in the balance of accounts receivable-operating loans and a decrease in average loan yield as a result of declining proceeds from interest on operating loans.
On the other hand, operating expenses were down 7.1% compared year-on-year to 272,732 million yen. Although provision for loss on interest repayment and provision of allowance for doubtful accounts increased respectively by 6,204 million yen and 1,755 million yen year-on-year, general and administrative expenses decreased by 22,580 million yen due to efforts to reduce operation cost.
As a result, operating income of 6,063 million yen and ordinary income of 7,917 million yen were recorded. Net income decreased by 20,901 million yen due to booking of 10,167 million yen of business structure improvement expenses, and net loss of 7,239 million yen was recorded.
For the forecast of cash dividends per share for this fiscal year, the cash dividends for the term-end will be 5.00 yen, and the cash dividends for the second quarter was 5.00 yen. As a result, the annual cash dividends will be 10.00 yen.
Further Strengthening Business Management
In November 2006, ACOM announced "Group Management Reform," which included streamlining management efficiency by drastic cost structure reform due to the forecasts for a decrease in the unsecured loans receivable outstanding and average loan yield, influenced by amendment of the Money Lending Business Act, etc., and ACOM has been tackling to complete the reform by fiscal year March 2011.
In addition, ACOM has aimed to react swiftly to the changes in the business environment, especially for the full enactment of the revised Money Lending Business Act. ACOM has taken measures to strengthen its internal control system, and became the forerunner of the industry to implement lowering a maximum interest rate in June 2007.
As a result, the aim of reduction of 40 billion yen in the operation cost was achieved for one year in advance at the fiscal year March 2010.
However, business environment surrounding us is getting harsher than that of the fiscal year March 2007, when "Group Management Reform" was announced. For example, requests for interest repayment have stayed at high level, and the balance of accounts receivable-operating loans has been decreasing.
On the other hand, customer's expectations for our financial services have been stable, and ACOM understands that it is our social mission to respond the customer's needs.
Under these business environments, ACOM decided to pursue the strengthening business management policy in order to respond the expectations of stakeholders such as customers and shareholders, etc in November 2009. ACOM promotes drastic cost reduction policy by restructuring business outlets, improving personnel efficiency, and reducing other operation cost. Operation cost at the fiscal year March 2012 is expected to decrease by 32.1 billion yen to 60 billion yen, compared to the fiscal year March 2009.
Business and Capital Alliance with MUFG Group in Progress
As announced on September 8, 2008, ACOM, Mitsubishi UFJ Financial Group, Inc. ("MUFG"), and The Bank of Tokyo-Mitsubishi UFJ, Ltd. ("BTMU") agreed to position ACOM as the core company in the consumer loan business within the consumer finance segment of the MUFG group and to further expand the strategic business and capital alliance concluded in March 2004. The repositioning was done to also construct a highly competitive consumer finance business in ACOM and materialize consumer finance segment with potential for massive growth in the MUFG group. Afterward, in December 2008, ACOM became a consolidated subsidiary of MUFG.
In April 2009, DC Cash One Ltd. ("Cash One"), which was consolidated subsidiary of ACOM, transferred credit card guarantee business to Mitsubishi UFJ NICOS Co., Ltd. ("MUN") while RELATES CO., LTD. was merged into MU Communications Co., Ltd. ("MUCC"), a subsidiary of BTMU, making MUCC an equity-method affiliate of ACOM.
In May 2009, the loan business of Cash One was integrated into ACOM. In September 2009, ACOM succeeded unsecured card loan guarantee business of The Mitsubishi UFJ Home Loan Credit Co., Ltd.
Integration of MUN's unsecured card loan guarantee business into ACOM is also scheduled to be conducted in October, 2010. Business alliance emphasized on "selection and concentration" aiming for reorganization and improving efficacy within the MUFG group is making a steady progress.
ACOM Group's Vision
As new mid-term business plan, which sets target for next five years, is put into action, we have set management vision of "becoming the `leading company` which provide prime satisfactions to as many customers as possible and win trust in the consumer finance industry."
<3 components emphasized in the management vision>
1. Customers first, which is the basis of our business and a constituent of our corporate philosophy. This also reflects our intention to provide prime satisfactions to as many customers as possible.
2. Concentrate our management resources to "personal loan market" regardless of the nature of business segment.
3. Establish a solid brand image of "leading company which win trust from the market" by further strengthening the brand of "safety and trust."
Under this management vision, ACOM is going to respond precisely to the environmental changes while attempting to transform its business model. We will keep moving to materialize the company with "top share" in personal loan market.
We look forward to your ongoing support as we embrace the challenges for the future.
