I am Akihiro Teramachi, President and CEO of THK. I would like to share with you the overview of the financial results for the first six months of the current fiscal year, ending in December 2023. Please turn to page three. Consolidated revenue was down by 0.6% year-on-year to JPY 185.5 billion. Overall demand slowed in the industrial machinery business, especially for electronics, and despite the conversion of backlogs that was previously trending high into actual sales, revenue was down. On the other hand, although vehicle production cuts caused by the shortage of parts supplies still had impact on the automotive and transportation equipment business, sales trends started to recover. Consolidated operating income declined 21.2% year-on-year to JPY 16.4 billion.
Automotive and transportation equipment business turned into black ink, owing to positive impact from sales growth and various efforts aimed at improving the profitability. On the other hand, the industrial machinery business was negatively impacted by the volume factor stemming from sales decline, as well as full-scale launch of various activities aimed at future growth with reopening and increased investment for human capital. As such, the first half performance resulted in decline in top-line profit, but both the revenue and operating income beat the initial target set forth at the outset of the year. Next, I'd like to explain the sales breakdown by region on page four.
Due to the factors mentioned in the previous slide, sales were down in Japan, China, and Asia and Other, but sales in the Americas and Europe grew, thanks to the recovery of the automotive and transportation equipment business, as well as the weaker yen. Let me go through the operating income on page five. First, I will explain the factors behind the increase and decrease in operating income in the industrial machinery business compared to the previous fiscal year. The factors that pushed down the operating income included JPY 10.4 billion from lower sales and volume, JPY 1.3 billion increase in fixed costs, such as higher investment aimed for future growth, and JPY 0.3 billion from the reclassification of other income and other expense.
Following through the factors contributing to the increase in profit, JPY 2.8 billion from change in the variable cost ratio, and JPY 1.5 billion from foreign exchange. I would like to explain the changes behind the operating income for the automotive and transportation equipment business on page six. The profit decline was caused by the JPY 0.6 billion fixed cost increase for human capital investment and others, and a JPY -0.4 billion impact from the change in variable cost ratio. Profit was higher, thanks to the JPY 3.4 billion volume impact from higher sales, and JPY 0.6 billion impact from FX, and JPY 0.3 billion from a reclassification of other income and other expense. Page seven is a snapshot of our balance sheet.
Total assets increased by JPY 9.1 billion year-on-year to JPY 569.4 billion. I will skip the details given the interest of time, so please have a closer look at the figures at your convenient time. Next, let's move on to the key measures. Please turn to page nine. There is no change in our pillars of growth strategy, namely full-scale globalization, development of new business areas, and change in business style, and we will further expand our business domains under our vision of becoming a manufacturing and innovative services company. In addition, we are strengthening sustainability and ESG measures further as basic prerequisites for advancing these strategies. Using page 10, I'd like to share the key initiatives taken in the respective businesses. For the industrial machinery business in particular, we expect a short-term adjustment in demand for FY 2023.
Having said that, there is no doubt that demand will grow over the medium to long term due to the progress of automation and robotization, and the growing investment related to semiconductors and EVs, and we anticipate an unprecedented level of demand in FY 2024 and beyond. In order to firmly capture such demand and achieve further growth, we have various initiatives underway in both businesses, aligned with the growth strategy described on the previous page. Let me start with the industrial machinery business on page 11. As you can see, we are promoting the THK DX project so that personnel freed up by reducing the person hours spent on routine tasks can be redeployed to higher value-added operations to expand sales.
To advocate these initiatives, we continue to work on further advancement of Omni THK, introduction of various ICT tools and structures, and development of digital human assets, the third point being the fundamental basis of the other two measures. Please turn to page 12. OMNIedge is capable of going beyond simply detecting predictive failure signs of parts. It is an IoT service providing solutions that can contribute to improving the overall equipment effectiveness, or OEE, by reducing various losses that occur at manufacturing sites. To date, we have developed a predictive failure detection AI solution for linear motion and rotary components, as well as a tool monitoring AI solution. They both contribute to the efficiency gains of customers' equipment by helping to reduce various losses, as illustrated on this page.
Furthermore, from July this year, we started providing the AI Diagnostic Service, which completely frees up customers from the cumbersome process of setting the threshold values for sensors to detect the abnormality. With the new service rollout explained on the previous page, OMNIedge has been adopted by many customers across a broad range of industries. We will continue to develop and introduce new solutions that lead to the reduction of various losses to maximize the customer's OEE, as well as to promote the deployment of OMNIedge in a prompt and steady manner. So far, I have presented our new services, such as Omni THK and OMNIedge. In terms of products in existing areas, we are introducing high precision and highly rigid products for semiconductor manufacturing equipment and others, which requires increasingly higher precision.
At the same time, in new fields, demand is steadily expanding in areas such as those shown on the slide. We will continue to launch new products. Particularly in the consumer and commercial field, we will further enhance our lineup with products that do not require high precision and are reasonably priced, but still maintain the characteristics of high rigidity, smooth movement, and high durability. We have also been launching a variety of new products that contribute to further automation and labor saving. The TT Slide ATG and ARG are suitable for sliding parts, such as for railway carriage doors and curved seats, and this business is now growing. The rod actuator, Cross 6000, is optimal to be used in various applications, such as for medical and nursing care beds, electric pliers, and office fixtures.
The TT Slide UGR is in use for kitchen lifting mechanisms and assisted vehicles, among other applications. Customers have robots and equipment with their own specifications that utilize our modules that contributes to automation and labor saving. We are providing modules and software that make it easy for the customers to befit the parts according to their unique specifications in the most optimal way, and create the robots that they need. Cylindrical coordinate module MLS offers a simple mechanism for automation of linear movement and rotation. Rotational module RMR is ideal for robotics joints. Aside from the robotic application, it is an essential module that can be used for various automation needs. Picking robot hand system model, PRS, automates the picking task in distribution centers. In addition, we are also introducing a variety of robots to support labor saving efforts in the service industry.
As you are already aware, we formed the robotics division last year and are now promoting the provision of service robots. As we have been presenting from the past, we have the SEED series for the service robot offering, and R7 and R8 are now gradually starting to be used in the market. In the AGV category, the brand for our transport robot is SIGNAS. Viewing function is embedded in the vehicle, and the vehicle can move around by actually seeing the signpost through the grid, so drawing lines on the floor or pre-programming using the virtual grid is not necessary. The robot will confirm very visual and move around following the command.
Route tapes are not necessary, and when the machine is relocated a different place, or if the vehicle has to work on a different equipment, simply relocating the signpost will enable the vehicle to operate in the new setting. If higher accuracy is required for the vehicle to operate closer to the equipment, additional cameras or eyes can be installed for movements with higher precision. Storage robots are also deployed in the market, and we see many types of robots operating in our daily lives. We will actively expand into the consumer and commercial market. In response to the growing demand in the future, we have been expanding our plans, starting in South Korea, and more recently in Jiangsu, Liaoning, India, and Niigata in Japan. We will also augment the equipment installed and promote automation. We are making a very good progress, particularly in India.
The total land size of the site in India is 205,000 sq m. The first phase of the plant construction was completed on a site of 37,000 sq m. We are making steady progress in our business development, leveraging on such a location. Next, I will explain the progress of the reorganization of the automotive and transportation business. First, by executing the recovery plan shown in the upper left-hand corner, we reduced costs by JPY 800 million in the first half of FY 2023. In pursuing the profit-oriented management, we discontinued the unprofitable products. The effort is starting to bear fruit in the magnitude of JPY 40 million. Negotiation for further price hike are also underway.
Under such circumstances, we allocated a fixed cost for the production of industrial machinery products, and in the first half, achieved production of JPY 1.2 billion worth of industrial machinery products. This amount will be further enlarged in FY 2024. As a result of all of the efforts, we managed to turn the business into profitability in the first half of FY 2023, and revised up the full year operating income guidance for the automotive and transportation business to JPY 1 billion. From FY 2024 onward, we aim to achieve profit growth by expanding the launch of next-generation products and other initiatives, as described on the slide. Let me elaborate on the next generation products on page 20. The volume for integrated brake system unit is steadily increasing, projected at 2 million units for the current fiscal year and 4 million units annual shipment over the medium term.
In addition, various new products, including unit for active suspension system and mechanical level control, have been developed and are being adopted. We will continue to expand our product lineup to promote the CASE over the medium to long term. As I mentioned earlier, we believe that working on industrial machinery products within the automotive and transportation business will be very effective for the next generation products, since the conventional technologies for industrial machinery are now being incorporated into our transportation business. Switching the topic to one that's getting traction these days, I would like to explain our approach to the enhancement of our corporate value from the perspective of improving PBR. First and foremost, we believe that the most important way to improve PBR is to increase ROE in this formula, and we have set a target of 17% for FY 2026.
To achieve this, we believe it's critical to increase ROIC in each business, specifically focusing on growing a profit, which is a numerator of ROIC. In order to enhance ROIC, the critical driver in the industrial machinery business will be top line growth, which will be achieved by steadily capturing the enormous growth in demand. In the automotive and transportation equipment business, the key to improving profitability will be the profitability enhancement initiatives that we have implemented to date, as well as the launch of various new products. In order to accelerate these efforts, capital will be deployed for future growth, including spending on CapEx and human capital. As part of investing into human capital, we will consider wage increases and stock-based compensation programs designed to serve as incentives for the employees.
Considering these funding needs, we believe it is appropriate to maintain a dividend payout ratio of 30% for the time being. However, if surplus funds arise while proceeding with this policy, we will actively consider share buybacks. We also regard share buybacks as a means of communicating our message to the market. As part of our efforts to strengthen communication with stakeholders, we are also striving to enhance information disclosure. As indicated on the slide, this year, we renewed our website, published integrated report, and issued annual securities report in English. Next, I'd like to explain our activities related to ESG and sustainability. Based on the policy illustrated on the slide, we are promoting various initiatives to realize a sustainable society.
In addition to supplying the linear motion products that bring many benefits, including energy saving, we believe that services such as Omni THK and OMNIedge, which help our customers improve their productivity, would also make a significant contribution to sustainability. We established a Sustainability Committee in October last year to further promote activities related to sustainability. Most recently, the Sustainability Promotion Subcommittee, structured under the committee, has been working to contemplate on the KPIs and KGIs for respective materiality and to support company-wide efforts. We also declared our advocacy to TCFD recommendations and made disclosure aligned with those recommendations. I believe that one of the most important aspects of sustainability is human capital development.
We are promoting the THK Education Outreach program with the aim of conveying the joy of monozukuri, or manufacturing, to children, and through the education of monozukuri, we are striving to develop creative developers who can address various challenges with their peers and lead the way to come up with solutions. The THK Monozukuri training kit was developed as part of this program, and we are now inviting schools that are interested in using the kit for technology classes and research activities, among others, and the kit is provided free of charge. Furthermore, as part of these efforts, THK participated in the Kids Day event hosted by the Ministry of Economy, Trade and Industry. Minister Nishimura was also present. We will continue such activities in the future to nurture human capital who will lead the future. Next, let me turn to the full year earnings guidance for FY 2023.
The graphs on page 27 illustrate the current order trend in the industrial machinery business by region. As you can see, the order flow is hovering at the bottom. Against your initial assumption that orders will recover by the middle of the year, as you can see, the current orders have yet to see a recovery trend. Based on what we have presented, as well as our outlook, we revised down our consolidated revenue projection for the fiscal year ending in December 2023 to JPY 345 billion, which will be a year-on-year decline of 12.4%. Specifically, in the industrial machinery business, we built the guidance based on the assumption that the current order inflow will remain unchanged in the second half. The projection is based on the scenario that the market will remain at the bottom range.
Against such environment, we will step up various cost control measures. Due to the large drop in sales, we project operating income of JPY 21 billion, income before income taxes of JPY 22.5 billion, and net income of JPY 16 billion, respectively. For the current fiscal year, while augmenting cost control to prepare for a short-term market correction, we will be ready to steadily capture demand in the subsequent recovery phase and actively promote first measures to achieve medium to long-term growth. This concludes the financial results briefing for the first six months of the fiscal year ending in December 2023. Thank you very much for your attention.