IHI (7013) Q1 2027 earnings summary

Executive summary

• Achieved record Q1 earnings and profit, driven by strong demand in civil aero engines, nuclear energy, and improved vehicular turbocharger and carbon solutions performance, even excluding a significant gain from property sales.

• Revenue for the quarter ended June 30, 2026 rose 10.9% year-over-year to ¥374.5 billion, with operating profit surging 250.5% to ¥73.2 billion, aided by a ¥40.0 billion gain on property sales.

• Profit attributable to owners of parent increased 361.3% year-over-year to ¥53.5 billion.

• Orders received declined year-over-year due to the absence of large energy projects, intentional suppression in underperforming subsidiaries, and prior divestitures.

Financial highlights

• Q1 FY2026 revenue: ¥374.5B, up ¥36.7B (+10.9%) year-over-year; operating profit: ¥73.2B (19.5% margin), up ¥52.3B; excluding property sales, operating profit was ¥33.1B (8.8% margin).

• Profit attributable to owners: ¥53.5B, up ¥41.9B year-over-year; EBITDA: ¥93.8B (25.1% margin), up ¥54.8B.

• Gross profit for the quarter was ¥89.4 billion, up from ¥75.0 billion a year earlier.

• Free cash flow improved due to property sales, despite a decline in operating cash flow from higher working capital.

• Basic and diluted EPS were ¥50.48, reflecting a 7-for-1 stock split.

Outlook and guidance

• Full-year revenue forecast revised to ¥1,840.0 billion (up 12.0% year-over-year), operating profit to ¥250.0 billion (up 51.0%), and profit attributable to owners of parent to ¥172.0 billion (up 29.4%).

• Record-high profits expected for the second consecutive year, with strong performance anticipated in Aero Engine, Space & Defense.

• Upward revision in Aero Engine, Space & Defense and Others segments, with potential for further upside.

• Assumed exchange rate for the year remains at JPY 145/USD.

• Dividend per share forecast for FY2026: ¥23.00 post-stock split.