I am Taguchi, General Manager of Finance Unit. I'd like to present the outline of financial results for fiscal year 2022. I'll explain the results for FY 2022, followed by the forecast for FY 2023. Page four is the highlights of FY 2022 results. three highlights are listed. Due to the steady progress in major projects, including LNG in Canada and a refinery in Iraq, both net sales and net profit were above the forecast. Order intake was in high level, almost in line with the plan, and a sufficient level of order backlog, JPY 1,563.4 billion, was secured. As for dividend, following the shareholder return policy, we keep the dividend payout ratio of 30%. Number of shares decreased in this fiscal year following the share buyback completion of JPY 20 billion, which was decided in February.
With this, dividend per share will be JPY 38 , up by JPY 2 from the forecast. This is the income statement. We recorded substantial year-on-year growth in sales and profit. Net sales were JPY 606.8 billion, up 42% year-on-year. Profit ratio increased 0.4 percentage points to 11%. Operating profit increased 77% to JPY 36.6 billion, despite the increased SG&A cost. Ordinary profit increased 68% to JPY 50.5 billion, and profit and loss attributable to owners of parent turned positive, JPY 30.6 billion. ROE was 7.8%. This is segment information. In Total Engineering segment, sales and profit increased year-on-year.
Net sales increased JPY 173.6 billion year-on-year to JPY 551.6 billion as large project in Canada and Iraq overseas, and life science and biomass power plant businesses in Japan progressed steadily as planned. Segment profit increased by JPY 16.3 billion year-on-year to JPY 33.4 billion due to the profitability improvement with the steady execution of project and impact by depreciation were yen. In the fourth quarter, additional profit was posted due to the profitability improvement in multiple steadily ongoing project, including those close to the completion. In Functional Materials Manufacturing segment, net sales increased slightly to JPY 47.7 billion, but profit stayed flat at JPY 7.1 billion. In addition to the demand decrease in semiconductor-related businesses, soaring fuel cost and raw material cost impacted to push down the profitability.
Other segment is as shown here. Outline of contract of Total Engineering segment. Overseas new contract substantially recovered to achieve JPY 696.3 billion. Domestic new contract remained at JPY 127.6 billion with a pushback of investment decision of large project into the next fiscal year. The total of overseas and domestic was JPY 823.9 billion. Major new contracts include gas oil separation unit in Saudi Arabia, chemical project in Thailand, Floating LNG in Malaysia, and large-scale ethylene plants in the U.S., which was posted in the fourth quarter. Outstanding contract. As new contracts were in high level of over JPY 800 billion, outstanding contract as of the end of the fiscal year were JPY 1,563.4 billion, up JPY 300 billion from the beginning of the year.
By business area, oil and gas account for 48% and LNG 24%. By region on the right, Middle East account for 46%, America and others, 20%, followed by Asia and Japan. As for major project, those in Saudi Arabia, Malaysia, and the U.S., which were received in this fiscal year, were added to the contract of over JPY 100 billion.
This shows you the consolidated financial conditions and cash flows. There were no major changes in financial conditions. Equity ratio was 55.7%, flat from the previous fiscal year. Operating cash flows recorded JPY +110.7 billion, which substantially exceeded the net income thanks to the collection of debt after a re-resolution of dispute over the project completed in the past. Cash flows from investing amounted to JPY -11.4 billion due to the acquisition of property, plant, and equipment, and digital related in investment. Cash flows from financing amounted JPY -61.2 billion due to repayment of interest-bearing liabilities, share buybacks, and others.
Cash and cash equivalents was JPY 332.7 billion, increased by JPY 44.7 billion from the beginning of FY 2022. The company's share of cash in joint ventures, which is off the balance sheet, decreased by JPY 67.9 billion to JPY 171.7 billion. I will explain our forecasts for fiscal year 2023. For the Total Engineering segment, new orders target is JPY 800 billion. Net sales forecast is JPY 800 billion as substantial sales increase is expected in this segment. Gross profit is almost flat of JPY 6.8 billion, and profit margin is 8.5%. We expect operating profit to be JPY 38 billion with no change in SGA expenses. Ordinary profit to be JPY 45 billion, and profit attributable to owners of the parent is JPY 32 billion.
Dividends per share will be up JPY 2 to JPY 40. Exchange rate used for this forecast is JPY 133 to $1. Next, I will explain the forecast by segment. In the Total Engineering segment, we can anticipate the steady progress of orders received in fiscal year 2022, and strong growth in both sales and profit are expected to continue from the previous year. Forecast of net sales is JPY 743 billion, and segment profit is JPY 38.5 billion. A drop in profit margin is estimated after discounting the personnel cost hike following the improvement of employees' benefits and DX related depreciation and running costs as well as fixed cost increase.
In the Functional Materials Manufacturing segment, profit margin fell in the fourth quarter of FY 2022 owing to the severe business environment. This affected our forecast, which estimates net sales to be 50 billion JPY flat from the previous year and segment profit to decline to JPY 5.7 billion . Others will be virtually flat. As for adjustment, we expect JPY 2.1 billion increase in cost for segment profit, taking into account the higher fixed cost that is not allocated to contractors, such as personnel expenses and R&D costs related to growth strategy. This concludes my explanation.
I am Sato, Chairman and CEO. I will talk about the perception of the market environment and the group's future direction. As for the market environment surrounding JGC Group in FY 2022, in Total Engineering business, in addition to the recovery in energy demand with an eye for the post-pandemic, for the diversified procurement of natural gas energy, with the backdrop of energy decarbonization of EU, overseas oil majors and oil and gas producing countries, state oil companies fully resume the capital investment. In Japan, with the continued clients' capital investment in life science sector, business has progressed steadily. In sustainability sector, including hydrogen, fuel ammonia, and SAF, they have been progressing specific project in Japan and abroad. In Functional Materials Manufacturing business, future uncertainty increased in global economy and semiconductor-related market in the second half of the fiscal year.
In general, clients' demand has been sustained firm. In Total Engineering business, amid the booming market condition, orders in FY 2022 hit the second high in the record at JPY 820 billion, pursuing the selective order taking. As for the business results, the full year target were achieved in net sales and profits in all levels due to the solid project management in ongoing project and the steady product demand in Functional Materials Manufacturing business centering on FCC Catalyst. ROE improved substantially from FY 2021 as 7.8%. To summarize, FY 2022 was an extremely fruitful year for the JGC Group, with great progress over FY 2021 in terms of orders and business results. As for FY 2023, global economy seems to be uncertain due to the prolonged inflation and the monetary tightening policy.
In Total Engineering business, we expect that equally robust market as FY 2022 will be sustained. On the other hand, in Functional Materials Manufacturing business, markets of chemicals catalyst product and the semiconductor-related product, which have been supporting profit, will be stalled. On the profit front, temporary, it will be slightly severe year. In FY 2023, we make maximum effort to achieve the high level order target of JPY 800 billion following FY 2022 and the full year business targets.
In the results meeting of the first half FY 2022 in November last year, I talked about the two conflicting issues of the response to the present energy demand and acceleration of decarbonization as the two challenges that the world is required to find solution for. Six months have passed since then. Now the energy industry is faced with three conflicting challenges or trilemma of energy affordability for the reasonable energy price, energy security to supply the appropriate amount of energy with stability, and decarbonization.
Based on our technologies and ability of technological integration, I believe JGC Group is able to contribute greatly to solve this trilemma. I think our group should serve as one of a few collaborators who can suggest realistic solutions, not only for the trilemma, but also for our clients, countries, and any stakeholders who are urged to solve problems. Fiscal year 2023 is the third year, a midpoint of our medium-term management plan. As more than JPY 800 billion of orders were secured in 2022, we feel our midterm sales target of JPY 800 billion is coming in sight. Fulfilling the order target and business forecast for FY 2023 is indispensable for us to achieve goals, including operating profit of JPY 60 billion, net profit of JPY 45 billion, and ROE of 10%.
In addition, according to the capital policy stated in the medium-term plan, we will make an appropriate and efficient allocation of resources in three areas, including working capital for the Total Engineering segment, the growth strategy investment, and shareholder return. By steadily implementing three key strategies in the midterm management plan, which President Ishizuka will explain later, we are aiming to improve gross margin, expand profit, and achieve the goal of ROE of 10%. We take an active stance to carry out the growth strategy investment. Currently, we have invested mainly in business incubations such as SMR and biomanufacturing. Toward the five-year of harvest after 2026, we are considering other ways of investment, including M&A, which can realize profit increase in relatively short term.
Shareholder return is positioned in an important place of our midterm capital policies, and we recognize returning profits to shareholders is a key management issue. In our midterm management plan, basic policy is to raise dividends per share by attaining the net income target of JPY 45 billion . As payout ratio is approximately 30% of net income, share buyback was conducted after the fourth quarter's financial result announcement, and we repurchased treasury shares of JPY 20 billion . While carrying out the capital policies, if excessive cash could be estimated based on the business outlook and cash flow situation, we would consider share repurchase in the future as well. JGC Group is now trying to make a qualitative shift from oil and gas-centered businesses to enter into the five business fields of energy transitions.
To this goal, we will continue to implement key strategies of medium-term plan to expand profits and further improve our corporate value. Thank you for your kind support. This concludes my presentation.
I am Ishizuka, President and COO. I present the business overview. I follow the table of contents. I talk about my perspective on the market environment of Total Engineering business of overseas and domestic. As Sato explained, moves for energy security and energy transition for decarbonization will continue. In particular, we have LNG project in Africa, Middle East, and Oceania. What is prominent is that in the field of LNG liquefaction facility, with a drive for decarbonization, we are observing the increase of E-Drive liquefaction facility instead of gas turbine. Downsizing to small and medium-sized equipment through the technological innovation. In North America, Middle East, and Oceania, project related to hydrogen, fuel ammonia, and SAF are increasing. Let me explain this on the next slide. In Japan, life science and biopharmaceuticals business are very robust, and they have grown into the pillar in our domestic business.
In Japan, capital investment started to increase rapidly for hydrogen, ammonia, and SAF. To summarize, in overseas business, along with a business for energy transition and decarbonization, LNG business with technological innovation will be progressing. In Japan, pharmaceuticals or non-oil and gas business will be the mainstay. In both overseas and domestic front, sustainability-related hydrogen fuel ammonia and SAF will finally take off in the second half of this year and the next. In the following year, more project will be moving. I will talk about the specific orders target. As Taguchi explained before, this year we aim to achieve order target of JPY 800 billion vis-à-vis the JPY 820 billion in the previous year. The mix is overseas JPY 620 billion and domestic JPY 180 billion. Expected project include LNG project in Middle East, Africa, and North America.
LNG receiving terminal and geothermal power generation plant are planned. In North America, demand of chemical has been increasing, and we have project for their facilities. In Asia, also chemicals, green hydrogen plant and hydrogen are expected project. In Japan, pharmaceutical, hospital, chemical, and onshore aquaculture are listed. In pharmaceuticals, in this year, we take on challenges in two large-scale vaccine plants and one bio-drug manufacturing facility. We aim to receive order of JPY 100 billion with these three plants. I'll explain the progress in major project with photos. This is a final sail away ceremony of modules of LNG Canada in Qingdao, China. I participated in the ceremony on March 7. This photo shows that two modules are loaded on the special vessels, and the ceremony was held in front of them.
Even through the COVID pandemic, it was completed almost on schedule. The clients commended our work. Pharmaceuticals have become the pillar in our domestic business, as mentioned. This is the API facility for small and mid-size molecule drugs for Chugai Pharma Manufacturing, which was completed in August 2022. This week, this facility was awarded the Facility of the Year 2023 by International Society for Pharmaceutical Engineering, ISPE, internationally prestigious society. As this is highly prominent owner, Chugai Pharma was very pleased. With this, we solidified our position as a leading EPC contractor for pharmaceutical manufacturing plants. This is Basra Refinery in Iraq. We are engaged in severe engineering, installation, and mechanical works. Due to COVID impact, slight delay occurred. Through engagement with clients, it is perceived that progress is almost in line.
This is a renewable energy facility for RENOVA, 75,000 kW mid- to large-size biomass power plant. Plant is completed and currently commissioning is underway. The delivery to a client will be in next month. As for Functional Materials Manufacturing business, it was already explained by Sato. Commodity chemicals and semiconductor-related products are stalled. We are striving to offset the dip with other products. The market condition of the next year onward will be brisk. As I will explain later, we continue investment. The demand for silicon nitride has been firm. I'll explain this later. We continue large-scale investment. Net sales in FY 2022 were JPY 48 billion. We will achieve JPY 50 billion in FY 2023. BSP 2025 progress and outlook of the midterm plan.
Taguchi explained the results of FY 2022 and the focus for FY 2023 before. In our focus for FY 2023, net sales are JPY 800 billion, operating income is JPY 38 billion, and net profit is JPY 32 billion. Our target for FY 2025 for net sales, operating income, and net profit are JPY 800 billion, JPY 60 billion, and JPY 45 billion respectively.
You may think that operating profit of JPY 38 billion for FY 2023 seems a little low. I'd like you to understand that our company values human resources very highly, and we improved staff treatments by 10% in December last year. However, we cannot claim this cost to the ongoing projects. Therefore, this personnel cost increase and fuel cost in manufacturing pushed down the operating profit. Without those temporary costs, operating profit can be calculated around JPY 45 billion instead of JPY 38 billion. As we move on to 2024 and 2025, I think we can aim the midterm target of JPY 60 billion. Also, when we receive new orders, we will be able to shift those costs onto the new prices. I think we will be able to achieve midterm targets. There are three key strategies in our medium-term management plan.
First one is a transformation of EPC operations. The second is an expansion of manufacturing business for high-performance functional materials. The third is an establishment of future engines of growth. Now I'd like to explain those strategies one by one. First, let me discuss the transformation of EPC. As you may see, our new order target for 2023 is on very high level, and the challenge given to us management is how to achieve such high goals. For this purpose, we are focusing on three approaches. One is to be selective in receiving orders. Projects quality, clients, and partners are very important factors on which we conduct a risk analysis. In addition to those factors, we also analyze whether we can efficiently utilize our resources. Second approach is expanding capacity. We established new operating center, JGC India, which I will explain later.
Third is the digital project started in April. After two years of development, EPC DX has almost completed and will be implemented to the projects for improving efficiency. In order to expand EPC business into growth markets, JGC Asia Pacific launched its operations in full scale and is carrying out our overseas policies, such as receiving contracts of industrial infrastructure and entering into new areas. In the domestic market, we will continue our efforts on businesses in life sciences, such as vaccination and pharmaceutical projects. New topics are written at the bottom. This picture was taken at the opening ceremony of JGC India in Chennai on April 27. JGC India is expected to work as operation center for Middle East. We'd like to increase the number of employees to 1,000 by 2030 from the current number of 200.
Next page is about the expansion of high-performance Functional Materials Manufacturing. I think I have covered most of it already. Despite the cooling off of semiconductor-related market, we will continue our capital investment as scheduled, especially in electric vehicle market where the demand is very strong. We will invest in silicon nitride substrates for power units for EVs to increase production. There is a picture at the bottom of the page which shows the existing plant. Adjacent to this facility, we bought 12.5 hectares land last year. We will invest JPY 10 billion in total to build facilities at this site to double the current production of silicon nitride substrates in 2025. The demands are growing farther for the future.
As for the establishment of future engines of growth, we see the markets of hydrogen and ammonia, SAF, and waste plastics moving forward to realization and towards EPC. Regarding SAF, we established the joint venture with Cosmo Oil and Cosmo Energy and launched the project to SAF production. Its production capacity is only 30,000 kL, accounts only a few percentage of government's target volume of 1.7 million kL. Oil companies are now planning to build bioalcohol-based SAF production projects instead of waste oil-related one. Technically speaking, alcohol requires a dehydration system which will be large in size. One system cost about JPY 50 billion, some of them are already scheduled. As for the gasification of waste plastics, we started the project with Iwatani Corporation and Toyota Tsusho Corporation in Nagoya metropolitan area. There is another photo of plant here.
In Niigata, we received a pilot plant of blue hydrogen and ammonia. This is a SAF plant I mentioned earlier. In next page, you see more SAF projects. Considering the future energy, JGC concluded the alliance agreement with Toyo Engineering Corporation for FEED and EPC services for domestic SAF plants in order to respond to the government target of 1.7 million kL, which I mentioned earlier. A picture in the bottom shows the signing ceremony of the pilot plant of green ammonia in Namie Town in Fukushima Prefecture. Receiving government subsidy, Asahi Chemical will provide hydrogen and JGC will produce ammonia for this ammonia project. Because it is a green energy, there is no supply during night. How to control this situation is our challenge, and we will develop new control systems. Next is the final page, and is about the growth strategy investment.
In our medium-term management plan, JPY 200 billion is allocated for investment. We have assessed investment and made decisions in 2021 and 2022. There is a kind of time lag between decision-making and payment. For example, we decided to invest JPY 32 billion for projects such as small modular reactors that Mr. Taguchi explained earlier, and a biomanufacturing program. Most of the payments for those projects will be made in 2023 or later. Capital investment in SAF development is the same. I would say that we have already decided the investments for about JPY 100 billion. For the expansion to new business areas and effective cash management, M&As are also studied, even though I cannot disclose information now. This concludes my presentation.