My name is Taguchi, General Manager of the Group Finance and Accounting Department. I will be giving you an outline of financial results for the period of six months ending September 2020, second quarter of fiscal year 2020, which ends in March 2021. I will begin with a review of the highlights of the second quarter. The second quarter results shows a good progress in accordance with the forecast, and we have maintained our earnings forecast for the full year. The second quarter gross margin ratio was higher than anticipated, reflecting improvement in the profitability of both domestic and overseas project. There has been no additional impact of COVID-19 on profitability, as construction works in the ongoing project have been progressing with measures put in place to prevent infection.
In terms of financial stability, we have maintained a robust financial base to be able to respond to possible deterioration in the business environment amid growing uncertainties in the economic situation. We booked significant amount of inbound order for the refinery project in Iraq. We now move to a statement of income and comprehensive income. Overall, our performance is in line with initial forecast. Net sales were JPY 199.4 billion, which was JPY 18.9 billion less than in the same quarter in the previous fiscal year. Gross profit rose JPY 3.5 billion- JPY 21.5 billion. Gross profit ratio improved by 2.5 points to 10.8%. Profitability in the Total Engineering segment improved, due in part to the completion of unprofitable project. In fact, the second quarter saw gross profit ratio exceeding full-year forecast as a result of such factors as profitability improvement in domestic and overseas project.
Operating income rose JPY 4.3 billion-JPY 11.5 billion . Ordinary income rose JPY 1.5 billion-JPY 11.9 billion . Profit attributable to owners of the parent decreased by JPY 500 million-JPY 3.9 billion . Next is the segment information. In the Total Engineering segment, while net sales decreased by 8.1% compared to the same period of the previous fiscal year to JPY 178.4 billion , segment profit increased to JPY 9.1 billion . The profit increase reflects largely through contribution of sales from LNG Canada project, as well as improvement in profitability with a number of domestic project reaching their final stages of construction with steady progress. Major project included in the net sales figure are the overseas project of LNG Canada and gas booster in Algeria and domestic chemical project.
With respect to additional cost resulting from extension of construction schedule for some project due to the spread of COVID-19, there were no further additional cost to note in the second quarter. For Functional Materials Manufacturing segment, net sales fell 8.0% compared to the same period of the previous fiscal year to JPY 20.1 billion, and segment profit declined 12.8% to JPY 2.7 billion. The halt in activities in the economy overall caused by COVID-19 has affected both catalyst and fine chemicals products, leading to lower demand and resulting in lower sales and profit. The achievement rate of net sales against the forecast for the fiscal year was 41% in the Total Engineering segment and 48% in the Functional Materials Manufacturing segment.
Next are the consolidated balance sheets. Total assets were JPY 664.2 billion, which was almost the same compared to the end of the previous fiscal year. Current assets decreased by JPY 10.3 billion, primarily due to a decrease in accounts receivable from completed construction contracts, including distribution from joint ventures. On the liabilities and net assets side, current liabilities decreased by JPY 38.8 billion due to a decrease in accounts payable for construction contracts and advances received on uncompleted construction contracts affected by the progress of projects in the final stages. The increase of JPY 19.6 billion in non-current liabilities is attributable to the issuance of bonds payable in the amount of JPY 20 billion. It was applied to the repayment of the previously issued bond in October. Net assets increased by JPY 12.1 billion, due largely to increase in foreign currency translation adjustment. The shareholders' equity ratio was 60%.
Next are the consolidated statements of cash flows. Cash and cash equivalents were more or less unchanged from the previous fiscal year-end at JPY 257.9 billion. Cash flows from operating activities was -JPY 17.5 billion due to settlement of accounts payable for construction contracts of projects in their final stages. Cash flow from financing activities was positive due to bonds payable issuance. The next topic deals with new contracts. Orders received totaled JPY 498.1 billion, comprising JPY 468.8 billion of overseas projects, such as a Refinery Upgrading Project in Iraq, and JPY 29.3 billion of domestic projects. With expectations for new large-scale contracts to be secured in the latter half of this fiscal year, both in Japan and overseas, we have maintained our full-year forecast of JPY 670 billion. Next, we refer to our outstanding contracts. The order backlog as of the end of September 2020 was JPY 1,264.2 billion.
By business area, LNG related orders accounted for 44%, falling below 1/2 of the total, and the petroleum refining related orders accounted for 37%. In terms of region, North American and others accounted for 39%, and Middle East accounted for 37%. The major contracts were LNG Canada and Refinery Upgrading Project in Iraq, both exceeding JPY 100 billion. Lastly, the full year forecast. There is no change from the forecast announced at the beginning of the fiscal year. This forecast has been prepared on the assumption that the impact of the spread of COVID-19 will not worsen significantly, and that Group's business environment will gradually recover towards the end of this fiscal year.
In the Total Engineering segment, although the sales for the period up to the second quarter stayed at 41% of the forecast, larger amount of sales is expected towards the fiscal year end on domestic projects and some other projects due to be completed in the latter half of this fiscal year. In the Functional Materials Manufacturing segment, sales reached 48% despite the impact of decrease in catalyst related demand. We believe that a steady progress is made to achieve our full year forecast. For this report, our exchange rate assumption has been revised to JPY 105 from JPY 107 to the U.S. dollar. For reference, the effect caused by an exchange rate fluctuations per yen is around JPY 2.5 billion for sales, JPY 200 million for gross profit and JPY 400 million for ordinary income.
This concludes our explanation of the outline of the fiscal results and for the second quarter of fiscal year 2020.
Good afternoon, everyone. I'm Sato, Chairman and CEO. Today, I'd like to talk about the current market environment and the direction of the long-term vision, Vision 2040. Firstly, as for our perspective for the business environment of JGC Group, basically it is unchanged from what we talked to you in May. The settlement of COVID-19 is yet to be seen. Due to energy demand declines, crude oil price has been from high $30-$40 per bbl range. Honestly speaking, we cannot see the sign of recovery of the entire global economy. As for Total Engineering business, steady orders are expected with the execution of capital investment in life science and renewable energy related businesses in domestic business. In overseas business, we are devoted to a few highly probable businesses, both in oil and gas and infrastructure businesses.
In Functional Materials Manufacturing business, we have concerns for the impacts of COVID-19 and U.S.-China trade frictions. Under such highly uncertain market environment, we were able to be awarded the formal order of Basra Refinery Upgrading Project in Iraq with the order value of over JPY 400 billion in October. It is extremely significant, not only in terms of making major progress in achieving the order target of this fiscal year, but also in securing over JPY 1 trillion of order backlog, which is equivalent to the sales of two years. As President Ishizuka will talk shortly, of course, it has great social significance in rebuilding Iraq. Latest orders were approximately JPY 500 billion, and in the remaining half year, we'll make our utmost effort to achieve the target of JPY 670 billion.
As you know, our group is now working on to compile a new midterm management plan, which starts from FY 2021, and its base long-term vision, Vision 2040. For the group to achieve sustainable and stable growth in the future, given the accelerated move for low carbon and decarbonization. We need to build the earning structure, which will not simply depend on overseas oil and gas segment. We have transformed into holding company structure in October 2019, and it was to realize the corporate group which will generate profit by several business domains, not depending only on overseas oil and gas business, and the direction remains unchanged.
Long-term vision, Vision 2040, is based on this framework. It will be consisting of two areas, existing business transformation and exploration of the new business opportunities. I believe this will give us a direction for us to follow in building our business portfolio. The new midterm management plan is positioned as the first step to realize our long-term vision. As for the long-term vision direction, first, we need to have a global view to preserve the environment of our planet. In 2050, the world population will be reaching 10 billion, and we need to think what JGC can do to address social issues such as energy and food, infrastructure development, and utilization of finite resources. What will JGC can do to address these challenges? This has become our important focus.
Energy demand keeps growing, particularly among emerging countries, but low carbon and decarbonization have now reached a point of no return. Furthermore, resources are finite, and we are now moving toward resources recycling and saving efforts away from the mass consumption. Both developed as well as developing countries need to have rich sets of infrastructure in order to enjoy good quality of life. With this in the background, our business portfolios need to cover new business areas as soon as possible other than overseas oil and gas operations. Though on the short and the mid-term basis, we still need to have LNG and oil gas as our core operations. Of course, it goes without saying that we need to have a combination of CCS and CCUS technologies. As for new business areas, SDGs have become an important compass to drive us to find solutions to the social issues.
We have six areas as candidates, low carbon and decarbonizing engineering, new energy, resource recycling, healthcare and life science, infrastructure, industrial innovation, and low carbon, high functional materials for environment. We have already now started our study and discussion trying to identify specific actions to take in each field. Among the new business domains, we believe the environment and energy, which cover four areas, will hold a critical key to the future of our group. President Ishizuka later will introduce some of the specific activities we are already engaged in our efforts to transform the existing business, as well as in exploring new business areas. JGC Group believes low carbon and decarbonization should be considered as a good opportunity for us in the current time.
We will aim to make the JGC Group as a sustainably growing entity by solving much broader and wider social issues such as resources, environment, health, and society. Details will be explained in around May next year. This concludes my report. Thank you indeed for your kind attention.
Good afternoon, everyone. I'm Ishizuka. I will explain the business overview. Please turn to page two. I will follow these eight points in contents. Please turn to page three. As for orders in Total Engineering, as Mr. Taguchi and Chairman Sato mentioned, we have already secured JPY 500 billion orders as of today against a target of JPY 670 billion. Toward the order target of JPY 670 billion, we will make further effort having some promising project that we'll touch on later. Please turn to page four. As for overseas orders, let me explain in two segments, oil and gas and infrastructure. Orders received in oil and gas in the first half were approximately JPY 470 billion. Main orders received were gas processing in Saudi Arabia, which was awarded by a subsidiary, and Basra Oil Refinery Modernization in Iraq, as mentioned.
As for infrastructure, against a target of JPY 140 billion, the orders received as of today were, unfortunately, JPY 1.4 billion. Some project, including non-ferrous metal in Indonesia, whose order was expected, were postponed to the next fiscal year, affected by COVID-19. It will be difficult to attain the order target this year. In the second half, in addition to the EPC project, whose progress I expected, we will focus on securing FEED orders for project materializing in the next fiscal year and onward to lay the groundwork for the future. Please turn to page five. Let me explain Basra Refinery as mentioned in orders received. This is an extremely significant project which will contribute to rebuilding and economic development in Iraq.
Although Iraq is one of the major oil-producing countries, as you know, currently, due to declined production capacity of operating refineries, they must import petroleum products, and that leads to foreign currency outflow of JPY 4.5 billion / annum. When this project becomes operational, it can stop the currency outflow, and that can be spent for the domestic rebuilding. During construction, 7,000 Iraqi technical workers will be employed, and after plant completion, job creation of more than 2,000 is expected. As a feature of this project, we will use smaller modules to the maximum so that on-site construction in Iraq will be minimized. Please turn to page six. This slide shows ongoing project, and this is our current largest project, LNG Canada. Through massive effort, we were able to recover to the pre-COVID-19 schedule.
Picture on the right shows the shipment of major equipment of heat exchangers, which was produced in Germany. Please turn to page seven for domestic business. Against a domestic order target of JPY 130 billion, first half results were JPY 29 billion. In the thermal power generation, some orders were close to be awarded last week, and we think it's possible to surpass the target of JPY 130 billion. The summary for the orders and for Total Engineering for this fiscal year. With the Basra Refinery Upgrading Project awarded and more projects to come here in Japan, we are already confident that we will reach JPY 600 billion + out of our target of JPY 670 billion.
We will further make efforts to achieve more as we move toward the end of the fiscal year. I will explain Functional Materials Manufacturing. Page eight, please. Mr. Taguchi explained net sales for the first half as well as the segment profit. Concerns still remain with us about the impact of COVID-19 pandemic and the U.S.-China trade frictions. We are now seeing some signs of resumed capital investment in semiconductors. Still faced with a tough situation, but we will aim to strengthen our sales activities both at home and abroad in order to achieve our targets. Page nine. Mr. Sato has already explained this. Here I will further explain our efforts to transform existing businesses as well as our efforts to explore new business areas. First, transforming existing business.
JGC has been quite aggressive for some time to be engaged in improving project execution productivity by utilizing digital and IT technologies. It is an eternal challenge for any project to improve productivity in the entire process of EPC. JGC has been implementing AWP or Advanced Work Packaging. AWP will improve efficiency in construction by subdividing the work of each phase of project execution. With the capital participation we had in the U.K. software company, MODS, we are now integrating our AWP and MODS virtual management with its image processing capability, particularly. This will drastically enhance AWP values. We plan to apply this to the Basra Refinery Modernization Project in Iraq.
We will further promote engineering and procurement digitalization. We will aim for fully digitalized EPC, which will give us seamless and highly productive project operations. The last page 10, please. Exploring the new business areas. Here, I would like to introduce to you two specific examples, so bear with me. First is waste and plastic gasification chemical recycling. This is a set of technologies to contribute to solving the plastic debris, which is causing global pollution of oceans. In October, we entered a licensing agreement with Ebara Environmental Plant, Ube Industries, and Showa Denko K.K. for EUP, a process for producing synthetic gas from plastic waste. Going forward, leveraging this process, we will make proposals for our global customers.
By utilizing this process, we would like to help our customers to build gasification facilities for plastic waste, as well as chemical products, manufacturing facilities using synthetic gas to be generated. The second case is hydrogen energy. JGC has placed its focus on ammonia as a hydrogen carrier. On October 27, a public and private council meeting was held for the first time to promote ammonia fuel. This meeting was participated by the METI, Ministry of Economy, Trade and Industry, as well as other government agencies, + 10 private businesses. We were selected as one of the 10 companies. Ammonia as an energy carrier has been already established as a part of supply chain, and ammonia does not emit CO2 when burned. Ammonia can be burned directly to provide power.
Green ammonia are produced directly from hydrogen coming from renewable energy source, and blue ammonia are made from fossil fuels, offsetting CO2 by CCS. They are certainly expected to contribute to the environment as CO2-free ammonia. JGC Group is involved in a series of efforts in the field of ammonia synthesis to develop new catalysts and new processes. We are already receiving FEED inquiries for multiple ammonia production plant projects in Japan and overseas. This concludes my presentation. Thank you indeed for your kind attention.