Kawasaki Heavy Industries (7012) Q4 2025 earnings summary

Executive summary

• Achieved record business profit of JPY 143.1 billion for FY2024, surpassing forecasts, with significant improvements in profitability and EPS, and strong performance from Aerospace Systems and ES&M segments.

• FY2025 business profit is forecast to reach a new record of JPY 145 billion, despite a stronger yen, anticipated U.S. tariff impacts, and market uncertainties.

• Compliance issues and ongoing investigations were acknowledged, with a commitment to transparency and strengthened governance.

• Comprehensive income increased to JPY 91.4 billion, up 23.9% year-over-year.

Financial highlights

• FY2024 revenue reached JPY 2,129.3 billion, exceeding JPY 2 trillion for the first time, with business profit margin improving to 6.7%.

• Profit before tax was JPY 107.5 billion, profit attributable to owners of parent JPY 88.0 billion, and ROE improved to 13.2%.

• Free cash flow turned positive at JPY 37.7 billion, with operating cash flow at JPY 148.9 billion.

• SG&A expenses increased by JPY 26.4 billion due to business expansion and inflation.

• Dividend per share for FY2024 was JPY 150, with a payout ratio of 28.5%.

Outlook and guidance

• FY2025 revenue is forecast to increase by 8% to JPY 2,310 billion, with business profit expected to reach JPY 145 billion.

• After-tax ROIC projected at 6.9% for FY2025, down from 8.0% in FY2024.

• Dividend forecast for FY2025 is JPY 150 per share.

• Business profit margin targets: 8% by FY2027 and at least 10% by 2030.