IHI (7013) Q4 2026 earnings summary

Executive summary

• Outlined a medium to long-term vision toward 2040, emphasizing technology-driven growth and high entry barriers in aerospace, energy, and infrastructure.

• Achieved record-high orders, revenue, and operating profit in FY2025, driven by defense, nuclear energy, and asset sales, with net income reaching an all-time high due to enhanced profitability and tax effects.

• Revenue rose 1.0% year-over-year to ¥1,643.4 billion, with operating profit up 15.3% to ¥165.5 billion and profit attributable to owners of parent up 42.8% to ¥160.9 billion.

• Major portfolio reforms included divestitures in Materials Handling, Turf Care, Packaged Boiler, Construction Materials, and partial equity transfer in Japan Marine United Corporation.

• Fiscal year 2026 forecast expects continued record highs in revenue, operating profit, and profit attributable to owners, led by civil aero engine, defense, and nuclear energy businesses.

Financial highlights

• FY2025 orders: ¥1,954.7B (+¥203.6B YoY); revenue: ¥1,643.4B (+¥16.5B YoY); operating profit: ¥165.5B (+¥22.0B YoY, 10.1% margin); net income: ¥160.9B (+¥48.2B YoY); EPS: ¥151.88 (+¥45.47 YoY).

• Cash flows from operating activities: ¥121.3B; ROIC: 11.0% (+0.5pt YoY); ROE: 28.4% (+2.1pt YoY); equity ratio improved to 26.9%.

• Cash conversion cycle improved to 109 days, though short of the 100-day target.

• Asset sales and business transfers contributed to profit growth and improved debt-to-equity and equity ratios.

• Total assets increased to ¥2,428.6 billion, equity attributable to owners of parent rose to ¥652.2 billion.

Outlook and guidance

• FY2026 revenue forecast: ¥1,830.0B (+¥186.5B YoY); operating profit: ¥240.0B (+¥74.4B YoY, 13.1% margin); net income: ¥165.0B (+¥4.0B YoY); EPS: ¥155.09.

• Orders expected to decline to ¥1,760.0B due to the absence of large energy projects, despite growth in civil aero engines and defense.

• Medium-term CAGR for revenue in growth businesses projected to exceed 10%, with operating profit margin targeted at 20% by the end of phase II.

• Dividend forecast for FY2027 is ¥23 per share (¥11.5 interim, ¥11.5 year-end).

• Focus on upfront investments in growth areas (civil aero engines, defense, nuclear power) and development-focus businesses (ammonia, space).