Let me explain the summary of our financial results for the first half of fiscal 2025. Consolidated revenue decreased by 2% year-on-year to JPY 176.2 billion. Revenue in the industrial machinery business increased thanks to a recovery in demand, mainly in China and the U.S. In the automotive and transportation business, demand has remained largely unchanged since the decline in automobile production in the second half of last year. Operating income decreased by 26.4% year-on-year to JPY 6.1 billion. While revenue increased in the industrial machinery business, operating income declined due to various unfavorable factors, including deterioration of sales mix, hike in various costs, and stronger yen than fiscal 2024. In the automotive and transportation business, profit declined due mainly to the negative impact of volume effects on decreased revenue.
In addition, profit declined due to costs incurred associated with the structural reform under the new management policy. As a result, revenue and profit decreased year-over-year. Although revenue exceeded the initial plan by JPY 2.9 billion, operating income fell short by JPY 800 million, mainly due to the increase in U.S. import tariffs. By region, revenue increased in China, Asia, and others, thanks to the factors mentioned earlier, but decreased in Japan, the Americas, and Europe year-over-year. Regarding the operating income year-over-year change factors in the industrial machinery business, the effect due to increased sales contributed positively as shown here. Next are the negative factors. In fixed costs during fiscal 2025, which is a period of structural reform, we made personnel investments, including granting stocks to employees as an incentive to achieve ROE of over 10%.
Variable cost ratio increased due to factors including sales mix deterioration, increases in U.S. import tariffs and various other costs, and restructuring related costs. In addition, the rise of the yen had a negative impact of JPY 500 million. Other income and expense included a loss of approximately JPY 500 million from equity method investments due to losses from equity method affiliates. Approximately JPY 400 million due to the absence of employment adjustment subsidies in Japan that we received in the first half of fiscal 2024, and approximately JPY 300 million due to the revision of fiscal 2024 financial statements for our Indian subsidiary. The change in operating income in the automotive and transportation business is shown here.
Although we no longer had the one-off expense of JPY 700 million that occurred in Q1 of fiscal 2024, and fixed costs decreased thanks to the effects of structural reforms, et cetera, profit decreased by JPY 600 million due to the negative effects from decreased sales. Next is our financial position. Total assets decreased by JPY 51.9 billion from the previous period to JPY 515.5 billion. The main point is that based on the capital policy announced last November, early realization of ROE of over 10%, we have completed the acquisition of shares worth JPY 40 billion. We continue to pay high dividends based on DOE, dividend on equity ratio, since the second half of last fiscal year.
In addition, FCTR, foreign currency translation reserve, decreased by JPY 12.7 billion year-on-year, resulting in a decrease in equity of JPY 62.8 billion from the previous period. Furthermore, we decided to cancel the shares we acquired this time and announced this yesterday. For other details, please refer to the figures in the slides. That concludes my explanation.
Thank you very much for attending the briefing in this heat, both physically and online. Next, I would like to explain the status of various initiatives that are underway for the early realization of ROE of over 10%, a new management policy announced in February of this year. Once again, this is the path to ROE of over 10%. Basically, we will achieve our goal through our own efforts without relying on increased revenue and profit due to market growth.
To achieve this, we designated the two years up to fiscal 2026 as a structural reform period, during which we push ahead with various reforms, transform into a lean, highly profitable structure, and achieve ROE of over 10% between fiscal 2027 and 2029. To that end, we are promoting a variety of initiatives comprehensively from number one, selection and concentration in the automotive and transportation business, to number five, evolution of corporate governance. First, we are proceeding with the partial closure of production sites in Canada, as already announced, aiming for completion by the end of August 2025. The product consolidation at production sites in China is scheduled to be completed by the end of 2025, and the progress is approximately 25% as of the end of Q2.
As I mentioned at the beginning of the year, we are working to complete selection and concentration on a whole new level by fiscal 2026 based on a policy of not ruling out any options or possibilities over the next two years. We are also taking various structural reform measures in our industrial machinery business. We are promoting various initiatives concurrently. First, I personally sent out a message to all employees and visited our sites both in Japan and overseas to directly communicate the background, what needs to be achieved, and my thoughts to raise the employees' awareness of the need to realize this. On the implementation side, we launched the ROE 10 project, formed working groups for each function and objective, and are promoting various activities with the support of external experts.
When these measures are executed, corporate planning department works with each department to manage the progress of improvement activities and consider improvement measures to strengthen monitoring functions. We expect these initiatives to materialize in the second half of FY 2025 and beyond, although the timing will vary depending on the measures. Next is profit increase in the growth areas. In the machine component parts business, we strengthened and deepened the task forces for seven priority areas that were announced and reorganized our development department to strengthen the system that identifies and incorporates needs in cutting-edge global fields. Additionally, we are implementing various measures to reduce the development time to one-third, which previously took about three years to develop and launch to market. Through these efforts, we will create, produce, and sell at high speed to maximize profits, as overseas needs will become increasingly important to us in the future.
Furthermore, in FA Solutions business, we have identified Mechatronics Modules and IoT AI as growth areas in order to cater to the needs of a wider range of machine users in addition to machine builders, and have been developing products and services as shown here. Among the recent announcements, in Mechatronics Module, we developed a small head model of pick-and-place robot PPR series equipped with force sensing function for the electronics industry, which is suitable for high-speed transport of fine, tiny work pieces. The IoT service, OMNIedge, where we have been developing various solutions with the goal of reducing all types of loss on-site, started offering a new GX Solution in July that monitors energy usage in factories. I don't think there are any other component manufacturers that have expanded their IoT solution lineup to this extent.
In this era of AI and IoT, THK aims to continue contributing to innovation in manufacturing through a three-layered structure of machine component parts, Mechatronics Modules, and AI IoT, and achieve sustainable growth. Regarding balance sheet management with emphasis on capital efficiency, we are steadily reducing our equity capital, as I explained earlier. We will continue this capital policy until we achieve ROE of over 10%. Even beyond that, we will continue to ensure that ROE exceeds our cost of shareholders' capital and further raise that level to continue providing stable shareholder returns. Next, on the evolution of corporate governance, we have been working to strengthen our governance structure as shown here. In fiscal 2024, we further strengthened our governance structure by appointing outside directors as the chairpersons of the nomination advisory committee and the compensation advisory committee and added another female director.
We also conducted a third-party board effectiveness evaluation in the form of questionnaire and interview. In fiscal 2025, we are evolving this further by improving the issues identified in the board effectiveness evaluation, revising the skill matrix, improving the director compensation system with an eye toward increasing corporate value, revising the personnel evaluation system, and formulating a CEO succession plan. Next is our financial forecast for fiscal 2025. First, we expect the impact of U.S. tariffs to be approximately JPY 3.3 billion on a consolidated basis in fiscal 2025 and plan to address this by basically reviewing sales prices.
In addition, we are working to minimize the negative impact on profits for the full year, including the negative impacts materialized in the first half by utilizing the production site of our U.S. subsidiary and reducing costs, and do not expect any negative impact on our fiscal 2025 plan at this time. Next is the current order trends. Orders for the industrial machinery business continue to recover overall, primarily in China, the U.S., and Taiwan. As I have explained so far, given that orders for the industrial machinery business are generally on a recovery trend, we will maintain the plan announced at the beginning of the year. This concludes our financial results briefing.
We will steadily capture demand, which is expected to recover in the future, and will vigorously promote various measures under our new management policy in order to improve our corporate value over the medium to long term. Thank you for your attention.