Mitsubishi’s heavy net profit falls, while order intake remains stable
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Mitsubishi’s heavy net profit falls, while order intake remains stable

Kaneb0

Nicholas Takahashi and Reina Sasaki
| Bloomberg

Mitsubishi Heavy Industries Ltd. reported a quarterly net profit that fell short of analysts’ forecasts due to lower defense orders, even as revenue continues to rise for core businesses.

Shares in the maker fell 2.5% after it reported net profit for the June-September period was 44.8 billion yen ($294 million), compared with analysts’ average estimate of 67.5 billion yen. Revenue was ¥1.19 trillion, beating the forecast of ¥1.17 trillion.

The company’s shares have more than doubled this year, thanks to investors’ high expectations for Mitsubishi Heavy’s energy and defense business. With energy and defense as mainstays of its medium-term plan, it aims to increase revenue in these segments by ¥1 trillion by the end of the 2026 fiscal year.

“Currency fluctuations and inflation make the future unpredictable, but strong order intake is encouraging,” CEO Seiji Izumisawa said at a briefing.

The aircraft, defense and space segment saw a decline of 197 billion yen in the first half of the current fiscal year, due to an exceptionally large order volume last year during the same period.

Operating profit, which excludes manufacturing and selling costs, rose 87% to ¥188 billion in the six months to the end of September. It maintained its full-year profit guidance of 350 billion yen and raised its forecast for order intake to 6 trillion yen, down 10% from last year.

Mitsubishi Heavy’s defense and aerospace segment saw order intake for gas turbine engines and steelmaking machinery increase, while profit increased in the energy, defense and space units.

Japan’s defense ministry has awarded a ¥56 billion contract to Mitsubishi Heavy to develop a glide-phase interceptor, a missile defense system designed to take down hypersonic weapons, the company said Friday.

The Tokyo-based heavy machinery manufacturer has the largest share of the global gas turbine engine market. It is also one of the main contractors in a trilateral partnership between Japan, Italy and the UK to build a next-generation stealth fighter jet.

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