Hitachi Capital : Consolidated Second Quarter Earnings Report ［IFRS］ For the Six Months Ended September 30, 2017 (PDF format, 152kBytes)

Consolidated Second Quarter Earnings Report

For the Six Months Ended September 30, 2017

October 31, 2017

［［［［IFRS］］］］

Corporate Name: Hitachi Capital Corporation

Stock Code: 8586 URL: http://www.hitachi-capital.co.jp Stock Listing: Tokyo Stock Exchange

Representative Director: Seiji Kawabe, President and CEO Inquiries: Satoshi Inoue, Executive Officer Phone: [phone]

Scheduled date of submission of financial reports: November 13, 2017 Scheduled commencement of dividend payment: November 28, 2017 Preparation of supplementary material for quarterly financial results: Yes

Holding of quarterly financial results meeting: Yes (for institutional investors and analysts)

(All amounts rounded down)

1. Consolidated Financial Results for the Second Quarter Ended September 30, 2017 (April 1, 2017 - September 30, 2017)

2. Consolidated Operating Results (Cumulative) (year-on-year change %)

   Revenues		Profit before tax		Net income		Net income attributable to owners of the parent		Comprehensive income
   Six Months Ended September 30, 2017 Six Months Ended September 30, 2016	¥ million 195,688 179,214	% 9.2 (1.1)	¥ million 24,049 22,841	% 5.3 (7.0)	¥ million 17,621 16,631	% 5.9 (7.0)	¥ million 17,243 16,163	% 6.7 (7.0)	¥ million 27,191 (1,919)	% ― ―

   Earnings per share (basic)	Earnings per share (diluted)	ROE
   Six Months Ended September 30, 2017 Six Months Ended September 30, 2016	¥ 147.52 138.29	¥ ― ―	% 9.6 9.7

   (Ref.) Volume of business: Six Months Ended September 30, 2017: ¥1,176,861 million; Six Months Ended September 30, 2016: ¥1,141,388 million

3. Consolidated Financial Position

4. Total assets	Total equity	Total equity attributable to owners of the parent	Equity attributable to owners of the parent ratio	Equity per share attributable to owners of the parent
   As of September 30, 2017	¥ million	¥ million	¥ million	%	¥
   	3,367,619	384,562	371,204	11.0	3,175.78
   As of March 31, 2017	3,245,029	363,178	349,844	10.8	2,993.03

5. Dividends

   Dividends per share
   1st Quarter	2nd Quarter	3rd Quarter	Year End	For the Year
   Year ended March 31, 2017 Year ending March 31, 2018	¥ ― ―	¥ 43.00 43.00	¥ ―	¥ 43.00	¥ 86.00
   Year ending March 31, 2018 (Forecast)	―	43.00	86.00

   Note: Changes from the latest released dividend forecasts：None

6. Forecast for the Fiscal Year Ending March 31, 2018 (April 1, 2017 - March 31, 2018)

7. (% is year-on-year for the fiscal year or the interim period)

   Revenues		Profit before tax		Net income		Net income attributable to owners of the parent		Earnings per share attributable to owners of the parent (basic)
   Fiscal year	¥ million 400,600	% 8.0	¥ million 43,000	% (6.6)	¥ million 31,800	% (7.1)	¥ million 30,500	% (7.4)	¥ 260.94

   Note: Changes from the latest released performance forecasts：Yes (Ref.) Volume of business: Fiscal year: ¥2,300,000 million

   ＊ Notes

   (For details, please refer to "2. Matters concerning Summary Information (Notes)" on page 9)

8. Significant changes in among subsidiaries in the consolidated cumulative period of the period under review: None

9. Changes to accounting policies; changes to accounting estimates (ⅰ) Changes to accounting policies required by IFRS : None (ⅱ) Changes to accounting policies other than (ⅰ) above : None

   (ⅲ) Changes to accounting estimates : None

10. Number of outstanding shares (common shares)

(ⅰ) Shares issued at end of term (including treasury stock)

As of September 30, 2017: 124,826,552 shares As of March 31, 2017: 124,826,552 shares

(ⅱ) Treasury stock at end of term

As of September 30, 2017: 7,940,166 shares As of March 31, 2017: 7,940,222 shares

(ⅲ) Weighted average number of shares outstanding

Six months ended September 30, 2017: 116,886,377 shares Six months ended September 30, 2016: 116,886,550 shares

＊ Consolidated Earnings Report is out of scope of the quarterly review.

This Consolidated Earnings Report is out of scope of the quarterly review procedures by our independent auditor in accordance with the Financial Instruments and Exchange Act.

＊ Explanation for proper use of the forecasts, etc.

Consolidated forecasts stated herein have been prepared using information available on the date of release. Accordingly, forecasts may differ significantly from actual results due to a variety of reasons. For the assumptions for forecasts and cautions regarding the use of the forecasts, please refer to "(3) Explanation on Future Forecast Information including Consolidated Earnings Forecast" on page 8.

Hitachi Capital Corporation will have the quarterly financial results meeting to report the financial results for the second quarter ended September 30, 2017 for institutional investors and financial analysts on October 31, 2017.

Contents

1. Qualitative Information concerning Financial Results for the Second Quarter Ended

   4

   September 30, 2017

2. Explanation about Operating Results 4

3. Explanation about Consolidated Financial Position 6

4. Explanation on Future Forecast Information including Consolidated Earnings Forecast 8

5. Basic Policy for Profit Sharing 8

6. Matters concerning Summary Information (Notes) 9

7. Changes in Material Subsidiaries during the Period 9

8. Changes to Accounting Policies and Estimates 9

9. Summary of Quarterly Consolidated Financial Statements and Major Notes 10

10. Summary of Quarterly Consolidated Statements of Financial Position 10

11. Summary of Quarterly Consolidated Statement of Profit or Loss and Comprehensive

    11

    Income

12. Summary of Quarterly Consolidated Statements of Changes in Equity 12

13. Summary of Quarterly Consolidated Statement of Cash Flows 13

14. Summary of Notes to the Quarterly Consolidated Financial Statements 14

15. Supplementary Information 15

16. Change in Quarterly Consolidated Performance 15

17. Contract Segment Information 16

18. Segmented Information by Business 17

20. Qualitative Information concerning Financial Results for the Second Quarter Ended September 30, 2017

21. Explanation about Operating Results

22. Summary of operating results

23. Summarized results for the six months ended September 30, 2017 were as follows.

    (¥ million, %)

    Six Months Ended September 30, 2016	Six Months Ended September 30, 2017	Y on Y Change
    Volume of business	1,141,388	1,176,861	3.1
    Revenues	179,214	195,688	9.2
    Gross profit	62,159	65,083	4.7
    Profit before tax	22,841	24,049	5.3
    Net income attributable to owners of the parent	16,163	17,243	6.7

    During the six months ended September 30, 2017, while the economy in the U.S. and the U.K. showed solid growth, the global economy remained unpredictable due to factors including growing geopolitical risks around the world in addition to the U.K.'s moves towards the Brexit and the tightening of monetary policies by China's financial authorities. In Japan, the economy showed a moderate recovery due to continuing monetary easing policy and economic policy.

    Under such circumstances, Hitachi Capital aims to achieve the target through "Change" and "Growth" insusceptible to the business environment and fulfill our Mission "We will be conscientious of the global environment and aim to become a Social Values Creating Company that provides new values to realize social development and richer life for people."

    Under the FY2016-FY2018 Mid-Term Management Plan announced on June 2016, the Company is aiming to increase ROE through ROA improvement, with Global Business (Europe, the Americas, China, ASEAN) maintaining high and systematic growth and with Japan Business improving profitability by focusing on growing sectors and improving operational efficiency. Also, we actively execute strategic investment in M&A, IT and human resources to support business growth. From April 2017, we added "sales finance," our strength, to the group common strategy to pursue low cost operation and provide added value. The Company has been working for further collaboration by entering into (1) a business alliance agreement with Mitsubishi UFJ Lease & Finance Company Limited ("MUL") with an aim to expand business domains and strengthen financial service functions including solutions, and (2) a business alliance agreement regarding an open financial platform with MUL, Hitachi, Ltd. ("Hitachi"), Mitsubishi UFJ Financial Group, Inc. ("MUFG") and the Bank of Tokyo-Mitsubishi UFJ, Ltd. ("BTMU") with an aim to contribute to Japanese equipment manufacturers and engineering companies engaging in infrastructure projects, in August 2016.

    During the six months ended September 30, 2017, Japan Business promoted expansion of the focused sectors consisting of Growing sectors (Social infrastructure, Eco- and energy-related, Vehicle, Local governments/public) and Start-up (green shoots) sectors to be developed (Food, Security, and BPO). We are promoting structural reform in fundamental/restructuring sectors (vendor solution, healthcare, and agriculture), and in October 2017, we consolidated the front function of vendor solution business in information/telecommunication sector, healthcare sector, and agriculture sector into Hitachi Capital NBL Corporation. In the future, we will integrate core systems and aim to enhance competitiveness of vendor solution business by improving service quality. In addition, we launched a full-fledged "Working method transformation" project in April 2017 and have worked on standardization of operations and IT utilization, in order to ensure growth of both our employees and the Company through productivity improvement and effective time