Mitsubishi Heavy Industries (7011) Q1 2027 earnings summary

Executive summary

• Q1 FY2026 saw strong growth in order intake, revenue, and profit across all major segments, with significant contributions from Energy Systems and Industrial Solutions.

• Revenue for the first quarter of FY2026 rose 15.5% year-over-year to ¥1,194.2 billion, with business profit up 65.1% to ¥159.6 billion and profit before income taxes up 99.0% to ¥176.4 billion.

• Net income nearly doubled year-over-year to ¥134.7 billion, driven by higher business profit and foreign exchange gains from yen depreciation, with basic EPS at ¥40.08, up from ¥20.32.

• Order backlog reached ¥14.1 trillion, up ¥865.3 billion from FY2025 year-end.

• The company completed the sale of its Logisnext business, now classified as discontinued operations.

Financial highlights

• Order intake: ¥2,022.4 billion (+26% YoY); revenue: ¥1,194.2 billion (+16% YoY); gross profit increased to ¥279.7 billion.

• Business profit: ¥159.6 billion (+65% YoY); net income: ¥134.6 billion (+97% YoY); EBITDA: ¥190.3 billion (+52% YoY); EBITDA margin: 15.9% (+3.8 pts YoY).

• Free cash flow: ¥391.5 billion (+¥327.1 billion YoY); operating cash flow: ¥284.6 billion (+¥194.9 billion YoY); net cash from investing activities turned positive at ¥106.9 billion, mainly due to Logisnext sale.

• Interest-bearing debt: ¥519.8 billion (down ¥130.5 billion YoY); D/E ratio: 0.16; total assets as of June 30, 2026, were ¥8,151.3 billion, with equity attributable to owners at ¥3,171.2 billion.

• Net interest-bearing debt reduced by ¥1,142.7 billion YoY.

Outlook and guidance

• FY2026 revenue forecast maintained at ¥5,400.0 billion (+8.6% YoY); business profit forecast at ¥540.0 billion (+24.9% YoY).

• Net income forecast at ¥380.0 billion (+14.4% YoY); EBITDA forecast at ¥660.0 billion (+19.2% YoY); basic EPS forecast at ¥113.09.

• Free cash flow forecast revised upward to ¥600.0 billion.

• Segment forecasts raised for Energy Systems and Aircraft, Defense & Space order intake.

• Guidance excludes impact from Middle East situation; company monitoring currency and economic trends.