Mitsubishi Heavy Industries (7011) Q1 2026 earnings summary

Executive summary

• Q1 FY2025 revenue rose 7.4% year-over-year to ¥1,193.7 billion, with business profit up 25% to ¥104.2 billion and net income up 9.5% to ¥68.2 billion, driven by growth in Energy Systems, Plants & Infrastructure Systems, and Aircraft, Defense & Space.

• Order intake declined 4.3% year-over-year to ¥1,768.6 billion, mainly due to a high prior-year base in Defense & Space, but order backlog increased by about ¥536.6 billion to a record ¥10,772.9 billion.

• Free cash flow improved to ¥64.3 billion, with operating cash flow at ¥89.7 billion, driven by advances from strong order intake, especially in GTCC.

• Net interest-bearing debt turned negative at -¥21.4 billion, improving by ¥479.4 billion year-over-year.

Financial highlights

• EBITDA increased 17% year-over-year to ¥143.2 billion, with EBITDA margin up 1.0 point to 12.0%.

• Gross profit increased to ¥266.2 billion from ¥240.5 billion year-over-year.

• Interest-bearing debt stable at ¥650.3 billion; equity ratio at 35.2%.

• Cash and cash equivalents at period end were ¥671.9 billion, up from ¥657.8 billion at the start of the year.

• No one-time expenses were recorded in either Q1 FY2024 or Q1 FY2025.

Outlook and guidance

• FY2025 guidance unchanged: revenue expected at ¥5,400 billion (+7.4% year-over-year), business profit at ¥420 billion (+9.6%), and net income at ¥260 billion (+5.9%).

• Free cash flow forecasted at -¥200 billion for FY2025, with dividends of ¥24 per share.

• Exchange rate assumption is 145 yen to the dollar, with $2.3 billion business profit exposure to FX risk.

• Segment forecasts: Energy Systems and Aircraft, Defense & Space to drive profit growth; order intake expected to decline due to prior-year large projects.

• Energy systems segment business profit target includes a ¥20 billion risk buffer for one-time expenses.