Kawasaki Heavy Industries (7012) Q3 2025 earnings summary

Executive summary

• Achieved record-high Q3 FY2024 revenue of ¥1,407.3 billion, with significant profit recovery led by Aerospace Systems and Energy Solution & Marine Engineering.

• Business profit surged to ¥79.0 billion from ¥0.7 billion a year earlier, and net profit attributable to owners improved to ¥44.1 billion from a loss of ¥13.5 billion.

• Orders received increased by ¥531.8 billion year-over-year to ¥1,821.9 billion, reflecting robust demand in key segments.

• All major segments except Powersports & Engine posted YoY profit growth; PS&E faced headwinds from recalls and production delays.

• Interim reports on compliance incidents in submarine repair and marine engine testing were published, with ongoing investigations and governance reforms underway.

Financial highlights

• Q3 FY2024 revenue: ¥1,407.3B (+¥178.2B YoY); business profit: ¥79.0B (+¥78.2B YoY); net profit attributable to owners: ¥44.1B (+¥57.6B YoY).

• Gross margin improved to 20.9% from 15.5% YoY; business profit margin rose to 5.6% from 0.1%.

• Operating cash flow improved but remained negative due to increased working capital, mainly from inventory build-up in PS&E and Aerospace.

• Interest-bearing debt increased to ¥908.2B (up ¥254.3B from Mar 2024); net D/E ratio rose to 115.1%.

• Basic earnings per share improved to ¥263.64 from a loss of ¥80.48 in the prior year.

Outlook and guidance

• Full-year orders forecast raised to ¥2,560.0 billion, mainly due to higher demand in Aerospace Systems and Rolling Stock.

• Revenue forecast for FY2024 revised to ¥2,160.0 billion, reflecting production and logistics risks.

• Business profit forecast maintained at ¥130.0 billion; profit attributable to owners of parent raised to ¥78.0 billion.

• Annual dividend per share maintained at ¥140.

• Assumed exchange rates: ¥150/USD and ¥160/EUR.