Hitachi (6501) Q2 2025 earnings summary

Executive summary

• Revenues and profits increased in Digital Systems & Services (DSS), Green Energy & Mobility (GEM), and Connective Industries (CI), driven by strong demand for digital transformation, power grid renewal, and data center solutions.

• Orders for DSS rose 9% year-on-year to JPY 1.5 trillion, and GEM orders surged 42% to JPY 3.1 trillion, reflecting robust demand in rail, energy, and nuclear businesses.

• Upward revisions were made to full-year revenue and adjusted EBITDA/EBITA forecasts for the three sectors, while consolidated EBITDA and net income remain impacted by equity losses at Astemo.

• Core free cash flow is expected to exceed the medium-term target, supporting long-term growth.

• Consolidated net income declined year-over-year due to equity losses from Hitachi Astemo.

Financial highlights

• Q2 revenues for the three sectors increased 11% year-on-year, with adjusted EBITDA/EBITA up 23% and margin improving by 1 point to 10.7%.

• Net income attributable to shareholders was JPY 116.9 billion for Q2, down JPY 22.1 billion year-over-year.

• Core free cash flow reached JPY 97.6 billion, with a full-year forecast of JPY 480 billion.

• Dividend per share increased by 10% to 21 yen, representing a 31% annual increase from the prior interim dividend.

• Share buyback of JPY 200 billion is proceeding as planned, with 61.7% completed by September.

Outlook and guidance

• FY2024 revenue for the three sectors is forecast to rise 7% year-on-year to JPY 9,150.0 billion, with adjusted EBITDA/EBITA expected to grow 23% and margin to reach 11.5%.

• Net income forecast for FY2024 is JPY 600 billion.

• Core free cash flow for the three-year period is expected to exceed the medium-term target by JPY 300 billion.

• GEM segment revenue and adjusted EBITDA forecasts were revised upward, with 19% revenue growth expected for FY2024.

• Management cautions that forward-looking statements are subject to risks including economic conditions, exchange rates, and supply chain disruptions.