IHI (7013) Q1 2025 earnings summary

Executive summary

• Revenue, operating profit, and orders received increased year-over-year in Q1 FY2024, led by strong civil aero engine performance and large power plant projects in Asia, with improved cost structure and positive cash flow.

• Operating profit margin reached 6.8%, with operating profit at ¥23.8B, and the group is on track toward its record high operating profit target of ¥110B for the year.

• Lifecycle businesses have expanded 1.5x since 2019, with Q1 progress in line with expectations.

• Orders received increased 4.2% to ¥328.7B and revenue rose 16.7% to ¥348.1B compared to Q1 FY2023.

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

Financial highlights

• Orders received: ¥328.7B (+4.2% YoY); Revenue: ¥348.1B (+16.7% YoY); Operating profit: ¥23.8B (+¥14.9B YoY); EBITDA: ¥41.1B (+¥15.2B YoY).

• Profit attributable to owners: ¥18.5B (+¥12.9B YoY); Operating margin: 6.8% (+3.8pts YoY).

• Cash flows from operating activities: ¥4.4B (improved by ¥63.9B YoY).

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

• Operating profit, excluding FX impact from the PW1100G inspection program, was ¥33.7B.

Outlook and guidance

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

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

• Dividend forecast unchanged at ¥100/share.

• Civil aero engines expected to continue driving growth; Defense systems and Carbon solutions to exceed prior year.

• Lifecycle businesses to remain stable; structural reforms in Vehicular turbochargers ongoing.