Mitsubishi Heavy Industries, Ltd.

Order intake in fiscal Q2 was JPY 3.3 trillion, up year over year, and order backlog was JPY 11.5 trillion, up JPY 1.2 trillion from the last fiscal year-end. Net income was JPY 114.9 billion, up 7% year over year and described as the highest second-quarter result. Free cash flow was JPY 151 billion, and interest-bearing debt was JPY 607.7 billion. For FY2025, order intake guidance was raised to JPY 6.1 trillion, revenue stays at JPY 4.8 trillion, business profit remains at JPY 390 billion, and free cash flow remains 0. Segment-wise, Energy Systems order intake was revised up from JPY 2.2 trillion to JPY 3.2 trillion, while Plants & Infrastructure business profit was raised from JPY 60 billion to JPY 70 billion; Logistics, Thermal and Drive Systems was lowered due to weaker turbocharger and HVAC sales. Management also noted a JPY 145 exchange-rate assumption and JPY 1.6 billion sensitivity.

Eisaku Ito emphasized a strategy centered on “group-wide optimization,” focused resource deployment, and quickly converting strong orders into profits. He pointed to GTCC demand as a reason to increase production volume by 30% and highlighted defense-related opportunity in Australia as another area requiring concentrated internal support. He also framed the U.S. as a major market, noting last year’s U.S. sales of JPY 1.1 trillion and saying the company will prepare to meet customer demand there through equipment and services, especially in energy.

Hiroshi Nishio focused on how the reported figures are being adjusted for the Mitsubishi Logisnext transformation, noting that order intake, revenue, and business profit exclude ML while the balance sheet still includes it with separate held-for-sale lines. He highlighted the JPY 30 billion one-off expense in Steam Power, including JPY 20 billion for the South African project, and explained that increased GTCC order intake lifted contract liabilities by JPY 260 billion, supporting positive free cash flow of JPY 151 billion. He also said the annual order intake increase is primarily from Energy Systems, while the second-half no longer includes the JPY 20 billion risk buffer that had been built in previously.

The main issues management preemptively addressed were the Mitsubishi Logisnext portfolio action, the JPY 30 billion one-off Steam Power provision, and why defense order intake looks lower versus the unusually high levels in FY2023 and FY2024. Nishio said the current year’s defense intake of JPY 1.2 trillion is below those peak years but still at a high normal level. Management also explained that the South African project provision reflects ongoing discussions with the customer over construction-related costs after the last unit began operation in September 2025.