Kawasaki Heavy Industries (7012) Q1 2025 earnings summary

Executive summary

• First quarter FY2024 revenue reached a record ¥444.2 billion, up 9.6% year-over-year, driven by strong Aerospace Systems, Energy Solution & Marine Engineering, and Precision Machinery & Robot segments, aided by yen depreciation.

• Profit before tax and profit attributable to owners of parent hit record highs for a first quarter, supported by foreign exchange gains and improved segment performance.

• Orders received were stable at ¥456.8 billion, with notable growth in defense-related, Energy Solution & Marine Engineering, and Precision Machinery & Robot orders.

• Aerospace Systems and Precision Machinery & Robot segments saw significant profitability improvement, while Powersports & Engine faced higher costs and recall-related expenses.

• Business profit increased 65.2% year-over-year to ¥16.9 billion.

Financial highlights

• Revenue: ¥444.2 billion (+¥38.8 billion YoY); business profit: ¥16.9 billion (+¥6.6 billion YoY, margin 3.8%); profit before tax: ¥25.8 billion (+¥10.9 billion YoY, margin 5.8%); profit attributable to owners: ¥15.4 billion (+¥6.2 billion YoY, margin 3.5%).

• Gross profit margin improved to 19.2% (from 16.3% YoY), with gross profit at ¥85.4 billion.

• Operating cash flow turned positive at ¥23.6 billion, up ¥46.0 billion year-on-year.

• Interest-bearing debt increased by ¥78.7 billion to ¥732.6 billion.

• Basic EPS was ¥91.79, up from ¥54.27 year-over-year.

Outlook and guidance

• Full-year revenue forecast remains at ¥2,250.0 billion, with business profit projected at ¥130.0 billion and profit attributable to owners at ¥78.0 billion.

• Orders received forecast raised by ¥50.0 billion to ¥2,410.0 billion, mainly due to increased defense orders.

• Dividend forecast for FY2025 is ¥140 per share, up from ¥50 in FY2024.

• Exchange rate assumption held at JPY 140/USD; outlook to be reassessed in the next report.