Mitsubishi Heavy Industries (7011) Q1 2025 earnings summary

Executive summary

• Order intake, revenue, and profit all increased year-over-year, achieving record or double-digit growth for the first quarter, driven by strong demand in Energy Systems, GTCC, Aero Engines, and Defense & Space.

• Business profit rose 61% year-over-year to ¥83.5 billion, with net income up 17% to ¥62.3 billion, supported by revenue growth, margin improvements, and a weak yen.

• Progress versus the full-year forecast was strong, at around 30%-32%.

• The quarter was generally in line with the plan, with no major surprises.

• Earnings per share rose to 18.53 yen, reflecting a ten-for-one stock split.

Financial highlights

• Order intake increased 15% year-over-year to ¥1,847.5 billion; revenue rose 13% to ¥1,111.6 billion.

• EBITDA reached ¥122.3 billion (+43.7% YoY), with an EBITDA margin of 11.0% (+2.3 pts YoY).

• Free cash flow improved by ¥14.1 billion year-over-year to -¥126.2 billion; operating cash flow at -¥67.8 billion (+¥92.3 billion YoY).

• Net interest-bearing debt decreased to ¥457.9 billion (-¥121.3 billion YoY); D/E ratio improved to 0.42.

• Cash and cash equivalents at period end were ¥579.4 billion, up from ¥431.3 billion at the start of the year.

Outlook and guidance

• FY2024 guidance unchanged: revenue forecast at ¥4,900 billion (+5.2% YoY), business profit at ¥350 billion (+23.9% YoY), and net income at ¥230 billion (+3.6% YoY).

• ROE expected at 10.0%; EBITDA forecast at ¥500 billion (10.2% margin).

• Dividend forecast at 22 yen per share.

• Guidance is based on exchange rates of US$1=¥145 and €1=¥155.

• No changes to the FY2024 earnings forecast since May's announcement.