IHI (7013) Q1 2026 earnings summary

Executive summary

• Orders received rose 29.1% year-over-year to ¥424.3 billion, led by strong demand in carbon solutions, civil aero engines, and defense systems.

• Revenue declined 3.0% year-over-year to ¥337.7 billion, and operating profit fell 12.3% to ¥20.8 billion, mainly due to the absence of large projects, yen appreciation, and higher SG&A expenses.

• Profit attributable to owners of parent dropped 37.6% year-over-year to ¥11.6 billion, impacted by foreign exchange losses and increased costs.

• Operating cash flow decreased, mainly due to higher tax payments, with free cash flow negative in Q1.

• Major portfolio reforms included the transfer of non-core businesses and a planned 7-for-1 stock split to broaden the investor base.

Financial highlights

• Orders: ¥424.3B (+¥95.6B YoY); Revenue: ¥337.7B (−¥10.3B YoY); Operating profit: ¥20.8B (−¥2.9B YoY); EBITDA: ¥38.9B (11.5% margin, −¥2.1B YoY); Profit attributable to owners: ¥11.6B (−¥6.9B YoY).

• Gross profit was stable at ¥75.0 billion; basic EPS decreased to ¥76.64 from ¥122.77 year-over-year.

• Cash and cash equivalents at quarter-end were ¥91.0 billion, down ¥45.7 billion from the previous fiscal year-end.

• Net cash flows from operating, investing, and financing activities were all negative, with operating cash flow at ¥5.3 billion.

• Free cash flow declined year-over-year to ¥20.9 billion as investment cash flow increased for growth initiatives.

Outlook and guidance

• Full-year FY2025 forecast unchanged: Orders ¥1,790.0B (+¥38.8B YoY), Revenue ¥1,650.0B (+1.4% YoY), Operating profit ¥150.0B (+4.5%), EBITDA ¥220.0B (13.3% margin).

• Profit attributable to owners forecast at ¥120.0B, with basic EPS of ¥112.85 (reflecting the stock split).

• Assumed FX rate for FY2025: ¥140/USD; dividend forecast for FY2026 is ¥120.00 per share.

• No changes to previous forecasts due to uncertainties around U.S. tariffs and global economic conditions.

• Segment guidance adjusted to reflect business transfer gains now included in Industrial Systems and General Purpose Machinery.