Kawasaki Heavy Industries (7012) Q2 2025 earnings summary

Executive summary

• Achieved record-high Q2 revenue and business profit, with strong year-over-year growth and a marked turnaround from prior year losses, especially in Aerospace Systems.

• Net profit attributable to owners was ¥13.7 billion, reversing a prior year loss; basic EPS was ¥81.59.

• Full-year business profit forecast remains at ¥130 billion, with annual dividends unchanged at ¥140 per share.

• Orders received rose to ¥895.3 billion (+¥34.5B YoY), supporting future revenue.

• Previous year’s Q2 was impacted by a ¥58B loss related to PW1100G-JM engine issues, distorting YoY comparisons.

Financial highlights

• Q2 revenue: ¥884.1–¥884.2 billion; business profit: ¥47.7–¥47.8 billion; profit before tax: ¥23.7 billion; net profit: ¥13.6–¥13.7 billion.

• Gross profit margin improved to 21.1% from 11.5% YoY; business profit margin rose to 5.4% from -4.3%.

• Operating cash flow remained negative, with an outflow of ¥36.9 billion; free cash flow was -¥86.7 billion.

• Interest-bearing debt increased by ¥186.1 billion to ¥840.0 billion; net D/E ratio at 109.6%.

• Cash and cash equivalents at period end rose to ¥127.4 billion from ¥85.4 billion a year ago.

Outlook and guidance

• Full-year revenue forecast at ¥2,180 billion, business profit at ¥130 billion, net profit at ¥73 billion; profit before tax revised down due to FX losses.

• Orders received forecast revised up by ¥20 billion to ¥2.43 trillion.

• Dividend forecast maintained at ¥140/share (payout ratio 32.2%).

• Assumed exchange rate for forecasts remains at ¥140 per dollar.