IHI (7013): FY2025 Results Summary — Record Orders, Revenue and Profit on Nuclear, Defense and Civil Aero Engines

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

IHI Corporation reported FY2025 (the year ended March 31, 2026) orders received of 1,954.7 billion yen, up 203.6 billion yen or 11.6% year on year, and revenue of 1,643.4 billion yen, up 16.5 billion yen or 1.0%. Operating profit rose 22.0 billion yen to 165.5 billion yen, lifting the operating margin by 1.3 points to 10.1%, while profit attributable to owners of parent increased 48.2 billion yen to 160.9 billion yen. The presentation reports record highs across orders received, revenue, operating profit, profit before tax and profit attributable to owners of parent, with surging demand in the Nuclear energy business propelling order intake to historic peaks. For FY2026 the company forecasts revenue of 1,830.0 billion yen, operating profit of 240.0 billion yen and profit attributable to owners of parent of 165.0 billion yen.

Consolidated Results (Full-Year Actual)

The presentation, dated May 8, 2026, is titled “Financial Results for FY2025 (IFRS) (For the Year Ended March 31, 2026)” and labels the completed fiscal year as FY2025 and the current year as FY2026. Figures for each item are rounded down to the nearest 0.1 billion yen. The company attributes the significant revenue and profit growth to Civil aero engines, Defense and Nuclear energy, supported by asset disposals and tax effects. EBITDA rose 26.2 billion yen to 241.8 billion yen (14.7% of revenue), while cash flows from operating activities fell 56.2 billion yen to 121.3 billion yen. The revenue figures include the impact of FX revaluation related to the additional inspection program for PW1100G-JM engines of 0.9 billion yen in FY2024 and (5.0) billion yen in FY2025.

Item (¥ Bil.)	FY2024	FY2025	Change
Orders received	1,751.1	1,954.7 [+11.6%]	+203.6
Revenue	1,626.8	1,643.4 [1.0%]	+16.5
Operating profit [%]	143.5 [8.8%]	165.5 [10.1%]	+22.0 [+1.3pt]
Finance income / costs etc.	(5.0)	19.9	+24.9
Profit before tax [%]	138.4 [8.5%]	185.4 [11.3%]	+47.0 [+2.8pt]
Profit attributable to owners of parent [%]	112.7 [6.9%]	160.9 [9.8%]	+48.2 [+2.9pt]
EPS [Yen]	106.41	151.88	+45.47
EBITDA [%]	215.6 [13.3%]	241.8 [14.7%]	+26.2 [+1.4pt]
Cash flows from operating activities	177.6	121.3	(56.2)
ROIC	10.5%	11.0%	+0.5 pt
ROE	26.3%	28.4%	+2.1 pt
Average FX rate [Yen/USD]	152.84	151.09	(1.75)
Closing FX rate [Yen/USD]	149.45	159.84	+10.39

In the group-wide operating profit bridge, the move from 143.5 billion yen in FY2024 to 165.5 billion yen in FY2025 comprised a change in FX rate of (10.1), profit deterioration in the overseas Energy business of (6.3), business reformation of FY2025 of (18.7), business divestitures and rebound from temporary factors affecting the previous fiscal year of +36.4, improved profitability of +12.0, the Aerospace segment of (7.7) and selling property of +16.4. The company states it executed thorough business reformation primarily in the overseas Energy business, while overall operating profit reached a record high driven by profit improvement in other businesses and asset sales.

On the balance sheet, total assets grew 188.1 billion yen to 2,428.5 billion yen as of March 31, 2026. The D/E ratio improved 0.29pt to 0.72 times and the ratio of equity attributable to owners of parent rose 5.4pt to 26.9%, reflecting profit accumulation and repayment of interest-bearing liabilities. CCC improved 6 days to 109 days and ROIC improved 0.5pt to 11.0%. Equity attributable to owners of parent increased 170.5 billion yen to 652.2 billion yen, and interest-bearing liabilities declined 24.8 billion yen to 489.8 billion yen.

Segment Results

Following the reporting segment change, results for Urban development have been reclassified from “Social Infrastructure” to “Other.” The Resources, Energy and Environment segment saw orders received surge 254.4 billion yen to 624.7 billion yen and order backlog rise 260.9 billion yen to 698.5 billion yen, although revenue fell 34.7 billion yen to 376.7 billion yen and operating profit declined 10.1 billion yen to 5.9 billion yen on business reformation costs. Aero Engine, Space and Defense grew revenue 96.0 billion yen to 651.7 billion yen, but operating profit slipped 10.3 billion yen to 112.4 billion yen as upfront investments such as R&D and personnel costs weighed on the segment despite higher Defense profit. Industrial Systems and General-Purpose Machinery lifted operating profit 19.9 billion yen to 30.7 billion yen on improved profitability in the Vehicular Turbocharger business and gains on business divestitures, and Social Infrastructure returned to a 3.7 billion yen operating profit from a (4.2) billion yen loss. Overseas revenue was 832.3 billion yen, or 51% of the total, versus 873.8 billion yen and 54% in FY2024.

Segment (¥ Bil.)	Orders received FY2024	Orders received FY2025	Revenue FY2024	Revenue FY2025	Operating profit FY2024	Operating profit FY2025
Resources, Energy and Environment	370.3	624.7	411.4	376.7	16.1 [3.9%]	5.9 [1.6%]
Social Infrastructure	150.4	133.2	146.0	131.9	(4.2) [(2.9%)]	3.7 [2.8%]
Industrial Systems and General-Purpose Machinery	484.4	460.7	484.8	450.5	10.8 [2.2%]	30.7 [6.8%]
Aero Engine, Space and Defense	719.9	703.1	555.7	651.7	122.7 [22.1%]	112.4 [17.3%]
Total Reportable Segment	1,725.1	1,921.9	1,598.0	1,610.8	145.4	152.8
Other	75.5	81.1	77.2	84.3	16.8	35.8
Adjustment (including corporate overhead costs)	(49.5)	(48.3)	(48.4)	(51.8)	(18.7)	(23.2)
Total	1,751.1	1,954.7	1,626.8	1,643.4	143.5 [8.8%]	165.5 [10.1%]

Within Resources, Energy and Environment, Nuclear Energy orders received rose from 46.4 billion yen in FY2024 to 110.4 billion yen in FY2025 and its revenue from 41.9 billion yen to 57.6 billion yen. In Aero Engine, Space and Defense, Civil aero engines orders received were 378.1 billion yen (FY2024: 352.4 billion yen) with revenue of 378.6 billion yen (FY2024: 351.6 billion yen), while Defense aero engines and equipment revenue rose to 212.1 billion yen from 150.2 billion yen. In Industrial Systems and General-Purpose Machinery, Vehicular Turbocharger revenue was 223.7 billion yen against 208.6 billion yen a year earlier.

FY2026 Forecast

IHI expects revenue, operating profit, profit before tax and profit attributable to owners of parent to reach record highs for the third consecutive year. Orders received are forecast to fall 194.7 billion yen to 1,760.0 billion yen because of a rebound from large projects in the Energy business in FY2025, even though Civil aero engines and Defense post higher orders. The assumed exchange rate for the FY2026 forecast is 145.00 yen to the U.S. dollar, and the company notes an FX sensitivity of 2.0 billion yen on operating profit per 1-yen fluctuation against the U.S. dollar, excluding the FX impact of the additional inspection program for PW1100G-JM engines.

Item (¥ Bil.)	FY2025	FY2026 Forecast	Change
Orders received	1,954.7	1,760.0	(194.7)
Revenue	1,643.4	1,830.0	+186.5
Operating profit [%]	165.5 [10.1%]	240.0 [13.1%]	+74.4
Profit before tax [%]	185.4 [11.3%]	230.0 [12.6%]	+44.5
Profit attributable to owners of parent [%]	160.9 [9.8%]	165.0 [9.0%]	+4.0
EPS [Yen]	151.88	155.09	+3.21
EBITDA [%]	241.8 [14.7%]	320.0 [17.5%]	+78.1
Cash flows from operating activities	121.3	100.0	–
Assumed FX rate [Yen/USD]	151.09	145.00	(6.09)

By segment, Aero Engine, Space and Defense is forecast to grow revenue 208.2 billion yen to 860.0 billion yen and operating profit 17.5 billion yen to 130.0 billion yen, while Resources, Energy and Environment operating profit is expected to increase 27.0 billion yen to 33.0 billion yen on improved profitability in the overseas Carbon Solution businesses and a rebound from FY2025 business reformation costs. The group-wide operating profit bridge to the 240.0 billion yen forecast includes 90.0 billion yen from FY2026 selling property and a (20.0) billion yen FY2026 risk buffer.

Segment (¥ Bil.)	Orders received FY2026	Revenue FY2026	Operating profit FY2026	Operating profit Change
Resources, Energy and Environment	360.0	390.0	33.0 [8.5%]	+27.0
Social Infrastructure	110.0	110.0	7.0 [6.4%]	+3.2
Industrial Systems and General-Purpose Machinery	450.0	440.0	30.0 [6.8%]	(0.7)
Aero Engine, Space and Defense	810.0	860.0	130.0 [15.1%]	+17.5
Total Reportable Segment	1,730.0	1,800.0	200.0	+47.1
Other	75.0	75.0	95.0	+59.1
Adjustment (including corporate overhead costs)	(45.0)	(45.0)	(55.0)	(31.7)
Total	1,760.0	1,830.0	240.0 [13.1%]	+74.4

Shareholder Returns

IHI states that its shareholder returns policy aims to balance stable dividend growth with prudent financial discipline, and that it aims for sustainable growth in dividends per share. Dividends per share for FY2025 were 20.00 yen (interim 10.00 yen / year-end 10.00 yen), up from 17.14 yen in FY2024, and the FY2026 forecast is 23.00 yen (interim 11.50 yen / year-end 11.50 yen). Per-share figures have been retrospectively adjusted for the 7-for-1 stock split implemented in October 2025 and rounded to the second decimal place.

Dividends per share (yen)	FY2023	FY2024	FY2025	FY2026 (Forecast)
Annual	14.29	17.14	20.00	23.00
Interim / Year-end	7.14 / 7.14	7.14 / 10.00	10.00 / 10.00	11.50 / 11.50

Capital Allocation Plan and Topics

For FY2026 to FY2028, IHI plans total investment of 650.0 billion yen, including 160.0 billion yen of R&D cost, against 409.7 billion yen (including 113.0 billion yen of R&D cost) under Group Management Policies 2023 covering FY2023 to FY2025. Capital allocation is prioritized toward Civil aero engines, Defense and Nuclear energy, as well as Development-focus Businesses such as fuel ammonia and space, with the company targeting significant profitability enhancement and cash flow expansion from FY2029 and beyond. Key investment themes include manufacturing technology and productivity for pressure vessels and steel modules, development of SMR and other next-generation nuclear reactors, capacity in the Civil aero engines maintenance business, and building the fuel ammonia value chain and the satellite constellation business.

Under Group Management Policies 2023, the company states that its operating margin and ROIC targets (operating margin 7.5%, ROIC 8% or higher) were achieved ahead of plan, while the CCC target of 100 days remains unmet at 109 days in FY2025 and cash generation is still a challenge. Cumulative operating cash flow over the three years was 361.1 billion yen and asset disposals totaled approximately 100.0 billion yen. R&D expenses were 39.6 billion yen in FY2025 (FY2024: 34.0 billion yen) with 50.0 billion yen planned for FY2026, while CAPEX was 97.6 billion yen (FY2024: 97.4 billion yen) with 130.0 billion yen planned for FY2026. The presentation also lists business portfolio reforms completed during the year, including the transfer of the Materials Handling System business of IHI Transport Machinery to Tadano on July 1, 2025, the transfer of IHI CONSTRUCTION MATERIALS to Vertex Corporation on October 1, 2025, and the transfer of Niigata Transys to the J-Will Partners group on December 30, 2025.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.