IHI (7013) Q1 2025 earnings summary

Executive summary

• Revenue, operating profit, and orders received all increased year-over-year in Q1 FY2024, driven by strong civil aero engine sales, large power plant projects in Asia, and yen depreciation.

• Operating profit margin reached 6.8%, with operating profit surging to ¥23.8 billion, and profit attributable to owners rising to ¥18.6 billion.

• Orders received grew 4.2% to ¥328.7 billion, and lifecycle businesses have expanded 1.5x since 2019, with Q1 progress in line with expectations.

• Cash flows from operating activities turned positive, reflecting improved collections and EBITDA growth.

• Misconduct investigations in Power Systems, Transport Systems, and subsidiaries are ongoing, with potential financial impacts under review.

Financial highlights

• Orders received: ¥328.7 billion (+4.2% YoY); Revenue: ¥348.1–¥348.2 billion (+16.7% YoY); Operating profit: ¥23.8 billion (+¥14.9 billion YoY); EBITDA: ¥41.1 billion.

• Gross profit increased to ¥74.8 billion; gross margin and operating margin improved to 6.8%.

• Profit attributable to owners: ¥18.5–¥18.6 billion (+¥12.9 billion YoY); EPS rose to ¥122.77.

• Cash flows from operating activities: ¥4.4 billion (improved by ¥63.9 billion YoY); net cash from investing and financing activities used ¥12.2 billion and ¥16.8 billion, respectively.

• Interest-bearing liabilities: ¥576.4 billion; D/E ratio: 1.36; Equity ratio: 18.6%.

Outlook and guidance

• Full-year forecasts maintained: Revenue ¥1,600 billion, Operating profit ¥110 billion, Net income ¥60 billion, EBITDA ¥180 billion, and operating cash flow ¥75 billion.

• FX assumption for guidance remains at ¥140 per $1; each ¥1 move impacts operating profit by ¥1 billion, excluding PW1100G effects.

• Annual dividend forecast unchanged at ¥100 per share.

• Focus on growth in aero engines, rockets, clean energy, and continued investment in production capacity and technology.

• Cash flows from operating activities forecast at ¥75 billion; free cash flow at -¥15 billion.