Kawasaki Heavy Industries (7012) Q1 2025 earnings summary

Executive summary

• Q1 FY2024 revenue reached a record ¥444.2 billion, up 9.6% year-over-year, driven by strong Aerospace Systems, Energy Solution & Marine Engineering, and Precision Machinery & Robot segments, with profit before tax and net profit also at record highs due to yen depreciation and favorable sales mix.

• Business profit increased 65.2% year-over-year to ¥16.9 billion, and profit attributable to owners of parent surged 69.2% to ¥15.4 billion, supported by foreign exchange gains.

• Orders received for Q1 were stable at ¥456.8 billion, with the full-year forecast revised upward due to strong defense-related demand.

• Aerospace Systems and Precision Machinery & Robot segments saw significant profitability improvements, while Powersports & Engine faced higher costs and recall-related expenses.

• Notable advances included a public demonstration of a hydrogen-powered motorcycle and a joint research initiative on direct air capture for carbon neutrality.

Financial highlights

• Revenue: ¥444.2 billion (+¥38.8B YoY); business profit: ¥16.9 billion (+¥6.6B YoY); profit before tax: ¥25.8 billion (+¥10.9B YoY); profit attributable to owners: ¥15.4 billion (+¥6.2B YoY); gross profit: ¥85.4 billion (up from ¥66.1B YoY).

• Operating cash flow turned positive at ¥23.6 billion, up ¥46.0 billion year-over-year, supported by advances in aerospace.

• Total assets increased to ¥2,815.4 billion; equity attributable to owners reached ¥656.8 billion.

• Basic EPS was ¥91.79, up from ¥54.27 year-over-year.

• CAPEX increased to ¥33.9 billion (+¥8.0B YoY); R&D expenses rose to ¥13.6 billion (+¥2.3B YoY).

Outlook and guidance

• Full-year revenue forecast remains at ¥2,250.0 billion, with business profit projected at ¥130.0 billion and profit attributable to owners at ¥78.0 billion.

• Orders received forecast raised by ¥50.0 billion to ¥2,410.0 billion, mainly due to increased defense orders.

• Dividend forecast for FY2025 is ¥140 per share, up from ¥50 in FY2024.

• After-tax ROIC expected at 6.7% (up from 2.8% in FY2023); forecasts based on an exchange rate of ¥140 to the dollar.