Mitsui E&S raises full-year profit forecast after strong first quarter

Mitsui E&S reported higher orders, sales and earnings for the first quarter of its fiscal year ending 31 March 2027, supported by progress across its project backlog.

New orders reached ¥105 billion, compared with ¥88.8 billion during the same quarter last year. Net sales increased to ¥91.7 billion from ¥81.2 billion.

Operating income rose to ¥10.2 billion from ¥8.9 billion. The operating margin edged up to 11.1% from 11%.

Ordinary income reached ¥11.7 billion, compared with ¥10.1 billion a year earlier. Its corresponding margin improved to 12.7% from 12.5%.

Profit attributable to owners of the parent increased to ¥8.2 billion from ¥7.2 billion.

The average sales exchange rate stood at ¥155.63 per US dollar, compared with ¥146.21 during the corresponding quarter last year.

Marine propulsion orders drive growth

The Marine Propulsion Systems segment recorded ¥67.1 billion in new orders, up from ¥41.3 billion a year earlier.

Segment sales increased to ¥40.6 billion from ¥38 billion. However, operating income declined to ¥3.8 billion from ¥4.1 billion.

Marine engine orders reached 69 units with a combined output of 1.31 million horsepower. This compared with 37 units and 730,000 horsepower during the corresponding period last year.

The company delivered 37 engines with a combined output of 760,000 horsepower. A year earlier, deliveries totalled 36 engines and 800,000 horsepower.

The order backlog stood at 160 engines and 3.98 million horsepower at the end of the quarter. Mitsui E&S expects to produce 138 engines with a combined output of 2.92 million horsepower during the full year.

Logistics Systems sales and profit increase

The Logistics Systems segment reported ¥11.4 billion in new orders, down from ¥20.9 billion during the same quarter last year.

Despite the decline in orders, net sales increased to ¥17.2 billion from ¥15.9 billion. Operating income rose to ¥3.1 billion from ¥2.9 billion.

Mitsui E&S said large overseas projects progressed steadily during the quarter. The segment also maintained a substantial pipeline of projects under negotiation.

The company secured an order for five rubber-tyred gantry cranes from Exolgan, which operates a container terminal at the Port of Dock Sud near Buenos Aires.

The cranes will use a near-zero-emission design capable of reducing carbon dioxide emissions by up to 70% compared with conventional diesel-powered models.

Following the latest order, Mitsui E&S’s Latin American track record comprises 53 rubber-tyred gantry cranes and six ship-to-shore cranes.

Other business segments record growth

The New Business Development segment generated ¥10 billion in orders and ¥11.5 billion in sales. Operating income reached ¥2.1 billion.

This compared with orders of ¥9.2 billion, sales of ¥8.1 billion and operating income of ¥1 billion a year earlier.

Peripheral Businesses recorded ¥16.4 billion in orders, slightly below the previous year’s ¥17.3 billion. However, sales increased to ¥22.4 billion from ¥19.1 billion, while operating income rose to ¥1.6 billion from ¥0.9 billion.

Full-year profit forecast raised

Mitsui E&S raised its full-year operating income forecast to ¥34 billion from ¥32 billion.

The company also increased its ordinary income forecast to ¥39 billion from ¥37 billion. Expected profit attributable to owners of the parent rose to ¥31 billion from ¥30 billion.

The free cash flow forecast increased to ¥8 billion from ¥6 billion.

Mitsui E&S maintained its full-year new orders and net sales forecasts at ¥370 billion each. Its forecast for interest-bearing debt also remained unchanged at ¥95 billion.

The revised forecast assumes an exchange rate of ¥158 per US dollar.

Mitsui E&S said geopolitical risks in the Middle East remained within its original assumptions. Following a review of procurement risks and possible cost increases, the company raised its forecast to reflect expected improvements in the Logistics Systems segment.

The group has completed 28% of its annual order target and 25% of its sales forecast. Operating income has already reached 30% of the revised full-year target, supported by high-margin projects recognised during the first quarter.

Cash flow turns negative

Operating cash flow was negative ¥1.4 billion, compared with positive ¥14.5 billion during the same quarter last year.

Mitsui E&S attributed the change mainly to the timing of accounts receivable collections, which had progressed significantly during the previous financial year.

Investing cash flow was negative ¥0.9 billion, reflecting spending on ammonia fuel supply facilities and other investments.

Free cash flow was negative ¥2.2 billion, compared with positive ¥20 billion a year earlier. Financing cash flow was negative ¥16.8 billion, mainly due to debt repayments and dividend payments.

Equity ratio improves

Total assets stood at ¥464.3 billion at the end of the quarter, down from ¥494.6 billion at the end of the previous financial year.

Cash and time deposits declined to ¥38.3 billion from ¥57.1 billion. Interest-bearing debt fell to ¥80.5 billion from ¥92.7 billion, mainly because of repayments of short-term borrowings.

Total net assets decreased to ¥228.6 billion from ¥233.8 billion. However, shareholders’ equity increased to ¥154.3 billion from ¥150.1 billion, supported by the quarter’s profit.

The equity capital ratio improved to 48.2% from 46.3%.

Methanol dual-fuel engine reaches milestone

Mitsui E&S DU completed the factory acceptance test of the DU-WinGD 6X82DF-M-1.0 LP-SCR engine.

According to the group, it is the first WinGD large marine engine in Japan capable of operating on methanol and conventional fuel. It is also the first WinGD large marine engine manufactured at the Mitsui E&S Tamano Works.

The company described the completion as an important step in expanding its marine engine production capabilities amid growing demand for alternative-fuel propulsion systems.

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