Mitsubishi Heavy Industries, Ltd.(7011) Explains Q1 FY2024 Financial Results
Mitsubishi Heavy Industries, Ltd. (7011) announced financial results for the first quarter of fiscal year 2024. Orders received increased 240.6 billion yen
Mitsubishi Heavy Industries, Ltd. (7011) announced financial results for the first quarter of fiscal year 2024. Orders received increased 240.6 billion yen YoY to 1,847.5 billion yen, recording an overall increase of 15.0%. Revenues likewise increased 127.5 billion yen YoY to reach 1,111.5 billion yen, representing a 13.0% growth.
Business profit increased by 31.5 billion yen year-on-year to 83.5 billion yen, a phenomenal 60.7% increase. This increase was mainly due to higher sales and improved profit margins in the Energy, Plant & Infrastructure, and Aerospace & Defense segments. In particular, orders for large gas turbines (GTCC) increased significantly in the Energy segment, and the Aero Engine segment also benefited from higher sales and profits in spare parts and MRO (maintenance, repair, and overhaul).
Net income also grew by ¥9.0 billion year-on-year to ¥62.2 billion, registering a 17.1% growth. Basic earnings per share for the quarter increased from 15.83 yen to 18.53 yen, and diluted earnings remained at about the same level. This indicates that the company has strengthened its return of profit to shareholders.
In terms of cash flow, net cash used in operating activities improved by 92.3 billion yen YoY to -67.8 billion yen, while net cash used in investing activities decreased significantly YoY to -58.4 billion yen. Net cash provided by financing activities amounted to ¥76,844.4 billion, and cash and cash equivalents at the end of the period reached ¥579,383.3 billion.
On the asset side, total assets increased by 401.7 billion yen year-on-year to 665.805.8 billion yen, and total equity increased to 245.8936 billion yen. The equity ratio rose to 35.1%, strengthening the company’s financial position. Net interest-bearing debt also decreased by 121.3 billion yen, improving financial soundness.
By segment, the Energy Segment performed particularly well, with a large contribution from an increase in orders for GTCC. The Plant & Infrastructure segment also saw increased sales in steelmaking machinery and machinery systems, and in the Aerospace, Defense & Space segment, progress in defense-related construction and improved profitability in the civil aircraft sector led to higher profits. On the other hand, the logistics, chillers, and drive systems segment saw a slight decrease in profits due to a decline in sales volume, but overall the segment showed a solid performance.
Looking ahead, the company forecasts a 13.2% y-o-y decline in orders to 58,000 billion yen, a 5.2% increase in revenue to 49,000 billion yen, and a 23.9% increase in operating profit to 350 billion yen ROE is expected to be 10.0%, and the company plans to increase its dividend from 20 yen to 22 yen per share.
On April 1, 2024, the company will execute a 10-for-1 stock split to increase stock liquidity to investors and adjust the dividend amount. As a result, the dividend per share was changed from ¥8 per share at the interim and ¥12 per share at the year-end to ¥11 per share at the interim and ¥11 per share at the year-end.
Overall, MHI achieved solid growth in the first quarter, improving performance in all segments and strengthening its financial position. Going forward, MHI intends to continue to pursue growth strategies in a variety of business fields. For more information on MHI’s future strategies, please refer to the reference article: Exploring MHI’s Future Strategies and Winning Opportunities.
