Kawasaki Heavy Industries (7012) Q2 2027 earnings summary

Executive summary

• H1 revenue reached a record ¥1,084.4bn, up 8.8% YoY; business profit more than doubled to ¥73.9bn.

• Higher sales, yen depreciation, IEEPA tariff refunds, litigation proceeds and other one-time gains supported earnings.

Financial highlights

• Orders received were ¥1,041.2bn, up ¥25.7bn YoY; gross profit increased to ¥215.1bn from ¥181.3bn.

• Business profit was ¥73.9bn, with a 6.8% margin versus 3.6% YoY; profit before tax was ¥56.8bn versus ¥35.3bn.

• Profit attributable to owners of parent increased to ¥30.9bn from ¥22.1bn; gross margin improved to 19.8% from 18.2%.

• Operating cash flow was -¥88.1bn and free cash flow was -¥137.5bn, as working capital and higher inventories absorbed cash.

Outlook and guidance

• Full-year revenue forecast remains ¥2,560bn; business profit guidance rose ¥5.0bn from August to ¥185bn, with a 7.2% margin.

• Full-year profit before tax is forecast at ¥161bn and profit attributable to owners of parent at ¥118bn; free cash flow is forecast at positive ¥20bn.

• Guidance assumes USD/JPY 150 and EUR/JPY 180, includes ~¥3bn of Middle East-related procurement and fuel costs, and incorporates ~¥28bn of U.S. tariff impact.

• The annual dividend forecast is ¥40 per share, including ¥20 interim and ¥20 year-end, under a DOE 4% target policy.