Mitsubishi Heavy Industries, Ltd.

Q1 FY2025 revenue increased 7% year over year to JPY 1,193.6 billion. Business profit reached JPY 100 billion, up 25% year over year, and net income rose 10% to JPY 68.2 billion. Order intake was JPY 1,768.6 billion, while order backlog was JPY 10.7729 trillion, about JPY 500 billion higher than the end of FY2024. Free cash flow was JPY 64.3 billion and operating cash flow was JPY 89.6 billion. For FY2025, guidance was unchanged from May; the company kept its JPY 145/$ exchange-rate assumption and said the Energy Systems business profit target is JPY 240 billion, including a JPY 20 billion risk buffer for one-time expenses.

The lead executive framed Q1 as a strong start to FY2025 and said the company is generally on track to achieve its 2024 medium-term business plan targets. Management highlighted stronger-than-expected order intake, with growth in Energy Systems and Plants & Infrastructure Systems offsetting a decline in Defense & Space order intake versus a very strong prior-year comparison. The tone was constructive, with confidence in execution and in the ability to manage tariff costs through pass-throughs.

The CFO emphasized record first-quarter performance, with revenue up 7% to JPY 1,193.6 billion, business profit up 25% to JPY 100 billion, and net income up 10% to JPY 68.2 billion. He said free cash flow was JPY 64.3 billion, driven mainly by operating cash flow of JPY 89.6 billion from advances received, and noted total assets of JPY 6,752 billion, interest-bearing debt of JPY 650.3 billion, and net interest-bearing debt of negative JPY 21.4 billion. He also reiterated that FY2025 guidance was unchanged, including a JPY 145/$ assumption and an Energy Systems profit target of JPY 240 billion with a JPY 20 billion risk buffer.

There was no separate analyst Q&A in the transcript, but management addressed two likely investor concerns: tariffs and the year-over-year profit comparison. On tariffs, the CFO said the direct Q1 P&L impact was immaterial, in the range of several hundreds of millions of yen, because the number of tariff-exposed transactions is not large and the company is working on cost pass-throughs. He also explained that the slower net income growth versus business profit reflected a roughly JPY 20 billion foreign exchange gain recorded in Q1 FY2024 that did not recur.