Message from the President

In the Specialty Financing segment, we have been expanding our business areas by aggressively pursuing M&A and undertaking collaborations with prime partners based on our high level of expertise in diverse products and the Group’s comprehensive strengths. We also focused on asset life cycle management and directed our energy into constructing a value chain that covers a wide range of activities from development and operation to recycling and resale of assets.

This segment is currently undergoing a sea change due to disruptions in the supply chain in the wake of the COVID-19 pandemic, rapid fluctuations in interest and exchange rates, and the need to address climate change issues. Even under this environment, however, we are continuously maximizing the value of our assets and providing high-value-added solutions, drawing on our keen discernment of assets and financial expertise as well as a solid platform with specialized human resources.

In fiscal 2023, we realized significant profits from unrealized gains on quality assets accumulated in our real estate and shipping businesses. In the aviation business, the aircraft leasing business of subsidiary Aviation Capital Group recovered, while GA Telesis, an equity-method affiliate with strengths in the secondhand aircraft and engine business, made great strides and significantly contributed to earnings.

We will continue to develop a portfolio for improving ROA by creating businesses responsive to the changing environment, actively investing, and expanding our asset turnover business, to achieve sustainable growth.

In fiscal 2023, the Specialty Financing segment, through its structured finance, aviation, shipping, and real estate businesses, strengthened its contributions to realizing a decarbonized society and developing social infrastructure as key aspects of Tokyo Century’s materiality.

In the structured finance business, we invested in a forestry fund arranged by the Sumitomo Forestry Group. Our involvement in managing the fund will contribute to creating high-quality carbon credits and developing new businesses related to forestry.

In the aviation business, we collaborated with a major European financial institution to arrange and execute a sustainability-linked Japanese operating lease agreement with equity financing for new aircraft to be introduced by Air France, in which the airliner’s lease payments are reduced based on the level of KPI achievement for reducing CO2 emissions. We will steadfastly contribute to realizing a decarbonized society by arranging and providing environmentally sound financial services.

In the shipping business, we have invested in a shipping fund that invests in environmentally sound LNG carriers and other vessels, and we will maintain our commitment to developing decarbonization services in the maritime industry.

Meanwhile, ANA InterContinental Beppu Resort & Spa and Hotel Indigo Karuizawa, both operated by our real estate business, were named winners in the Hotel General Managers and other categories of the Travel + Leisure Luxury Awards Asia Pacific 2024. Looking ahead, we will continue to play our role in providing social infrastructure for developing Japan as a tourism destination and revitalizing local regions through the hotel business.