Kawasaki Heavy Industries (7012) Q4 2024 earnings summary

Executive summary

• FY2023 revenue rose to 18,492億 yen, but business profit fell to 462億 yen and net income to 253億 yen; Q4 performance was strong, and business profit exceeded the February forecast.

• FY2024 guidance targets record orders and revenue, with business profit of 1,300億 yen and a return to growth.

Financial highlights

• Orders increased 459億 yen YoY to 20,834億 yen; revenue rose 1,236億 yen to 18,492億 yen.

• Business profit declined 361億 yen to 462億 yen; pretax profit was 319億 yen and net income attributable to owners was 253億 yen.

• Gross profit fell to 3,122億 yen from 3,338億 yen; gross margin decreased to 16.9% from 19.4%, mainly reflecting the PW1100G-JM charge.

• Yen depreciation reduced the FX loss to 26億 yen from 46億 yen; net income exceeded the February forecast as FX losses narrowed.

Outlook and guidance

• FY2024 orders are forecast at 23,600億 yen, revenue at 22,500億 yen and business profit at 1,300億 yen; net income is forecast at 780億 yen.

• FY2024 business profit margin is forecast at 5.8% and after-tax ROIC at 6.7%; the plan targets an 8% profit margin by 2027 and more than 10% by 2030.

• Forecast assumes USD/JPY 140 and EUR/JPY 150; FY2024 FCF normalization is expected after two consecutive years of negative FCF.