The time has come to start the Hitachi, Ltd. web conference on fiscal year 2022 second quarter earnings. Thank you very much for attending this conference despite your busy schedules. I would like to talk about the materials. Please refer to the IR site of the Hitachi, Ltd. website. I would like to introduce the speakers to you. Yoshihiko Kawamura, Executive Vice President and Executive Officer, CFO. Tomomi Kato, Vice President and Executive Officer, Deputy CFO. Masao Yoshikawa, Executive General Manager of the Investor Relations Division. CFO Kawamura will explain the highlight of the results. Please refer to the screen. Mr. Kawamura, please.
Thank you very much, everyone. Thank you very much for attending this meeting despite your busy schedules today. I would like to give you the results of the first half of fiscal year 2022, inclusive of the Q2, and also talk about the forecast for the full year. These are the key messages, and also I'll be talking about the first half results, fiscal 2022 forecast and appendix. Please now refer to page three, which are the key messages. Number one to number four are the key messages. First of all, number one, the first half of fiscal year 2022 consolidated total revenues was JPY 5,416.7 billion, which is an increase of 12% YoY. Adjusted EBITDA was JPY 393 billion, a YoY increase of JPY 20.6 billion.
Net income for the first half was JPY 172.5 billion, on a YoY basis, decline of JPY 149.9 billion. The reasons are shown below. Now, as we have already mentioned, in the past, we have shifted to the risk-sharing corporate pension plan. JPY 50 billion has been incurred as impact. Also, WACC increase has occurred, which stands for the weighted average cost of capital, has been impacted. Because of the interest rate rise, WACC has increased, and as a result, goodwill impairment loss of Hitachi Energy has been impacted to the tune of JPY 38.3 billion. The gains of the selling of overseas home appliance business has been subject to reactionary decline.
That is the reason why we have the decline of JPY 149.9 billion. Let's look at the orders next. Digital Systems and Services, as well as Green Energy and Mobility, have had firm orders, as mentioned here. Orders in Digital Systems and Services remain firm due to strong DX demand. Q2 orders was JPY 582.8 billion, YoY increase of 70%. Hitachi Energy orders continue to show solid growth. Green energy investments are being implemented on a worldwide basis. Currently, we have 2.0 backlog. Hitachi Energy has sales of JPY 1 trillion, so we have two years' worth of order backlog for Hitachi Energy.
On the part of Hitachi Construction Machinery, in Germany, Canada, and in the United States, major projects have been planned for Hitachi Energy. Third key point is the implementing of portfolio reforms, as mentioned here. Selling a part of Hitachi Construction Machinery, 25%, and with Toyota and the Toyota Company being able to sell this. Therefore, it will become an equity method affiliate for us going forward. The tender offer for Hitachi Metals, as expected in October 25. Tender offer for Hitachi Transport System will commence today. Hitachi Energy was 20% held by ABB. From December of this year, it will become 100% subsidiary for us. Therefore, we are making steadfast improvements in terms of portfolio reforms.
Now let's look at number four, which is the forecast for fiscal 2022. Revised upward to, in terms of revenues, of JPY 10.4 trillion, increased from 6% from the previous forecast. Adjusted EBITDA is JPY 877 billion, increased by JPY 32 billion from the previous forecast. Core pre-tax profits, this is the most important KPI for the midterm management plan, and forecast is JPY 250 billion, which is an increase of JPY 15 billion from the previous forecast. Net income is expected to achieve a record high of JPY 600 billion. This remains intact. Now, let me talk about the details with the following pages. Please refer to page four. This is a review of the macroeconomy outlook.
The upper table is showing the Hitachi forecasts as of September. You might be surprised. Euro was 2.7%, and now it's 3% here. Other regions have declined as well. In the recent past, European outlook has deteriorated. That is reflected in 3.0. The European Central Bank has decided to rate hike. Therefore, the business sentiment is declining. For the time being, these are the assumptions for September. China is also declining. Therefore, the macroeconomic outlook looks unfavorable, you know, globally. The qualitative matters are shown on the right-hand side or below.
There are positive factors such as DX demand increasing and green investment increasing. EV-related demand is increasing. More recently, infrastructure investment and economic measures are on the way in Japan. Investment in building national resilience, especially in the power network. In the United States, Infrastructure Investment and Jobs Act, CHIPS and Science Act, Inflation Reduction Act of 2022 are in place to promote infrastructure construction for economic growth. These are positive factors. There are negative factors that are greater than the positive factor on the right-hand side. For example, the Ukraine issue and soaring resource and food prices. Inflation is expanding globally. ECB rate hike and Germany and the European economic deterioration. U.S. FRB rate hikes that is taking place.
Chinese zero-COVID policy restricting the mobility. Real estate market deterioration, continued price hikes for material and logistics costs. Semiconductor shortage is having a significant impact for our business. Negative factors outweigh the positive factors. Page five, please. This is looking at the business environment in more detail. Horizontal axis shows the semiconductor shortage, soaring material prices and transportation costs. Electricity price is shown here. Electricity price is causing an issue in Japan. It is considered to be the highest in Japan. This is a real problem. There is also the situation in Ukraine and Russia. Vertical axis shows our business, Digital Systems & Services, Green Energy & Mobility, Connected Industries, as well as Hitachi Astemo. As you can see, the most significant impact is Astemo.
Impact is significant in the semiconductor shortage, in particular, in the copper is also being impacted as well. Electricity prices is having an impact. There has been a significant negative impact for Hitachi Astemo. For situation in Ukraine and Russia, in the beginning, we were very concerned, but it seems that the impact is very limited so far. There is no detrimental damage for the company from the situation in Ukraine and Russia. Please look at the next page. This is the second quarter. The first half will be shown later, this is for the different sector business highlights. At the very top is Digital Systems & Services. In the second quarter, JPY 594.5 billion, and adjusted EBITDA was JPY 68.1 billion.
Our ratio was 111%. YoY basis should be referred to. Adjusted EBITDA. For the second half, for the first half, I will give you a different explanation. But if you look at the second quarter, this is the result for the Digital Systems & Services. For Green Energy & Mobility, the revenues was JPY 559.1 billion. Adjusted EBITDA was JPY 27.3 billion, and ratio was 4.9%. To the right, YoY 118%, plus a JPY 7.2 billion increase in revenues and earnings. Below, Hitachi Energy should be referred to. And 328 and 19.6. And YoY 129% in terms of YoY.
This is very similar to the first half, which is also 6%. If you go to page 21, the full year forecast we have provided. This will increase to 8% , recover to 8% , for the full year. Connected Industries is next. 756.9 billion. Adjusted EBITDA, 88.1. 111.6% is the ratio. YoY basis, increase of 130% as well. Hitachi High-Tech is doing very well. 179.5 billion for the Hitachi High-Tech. The ratio is increasing to 16.9% at 30.3 billion.
Sales are JPY 495.8 billion, JPY 16.5 billion, and the ratio is 3.3% increase in revenues as well as earnings. The full year forecast will look significantly different. A consolidated total of JPY 2,046.9 billion. Adjusted EBITDA to JPY 38.1 billion, to 8.4%. That's it for the second quarter. Please refer to page seven. This is only for the second quarter. Looking at the orders results highlight is shown here. On a YoY should be referred to, and comparing the second quarter as well as the first half. Looking at the Digital Systems & Services, for the second quarter was 17%, for the first half was 14%.
Therefore, orders are proceeding very strongly, and specific deals are shown on the right-hand side. Hitachi Energy YoY 207% and first half 2.5%. As I mentioned at the outset, as mentioned here, the north of the HVDC link for Germany and Quebec coming to LaGuardia Airport of New York. These two projects have been making significant contribution. Building Systems 16% and 112%. Hitachi High-Tech 81% and 92%. It looks like a decline, but last year orders was very significant and semiconductor was in shortage, so we could not fully deliver. Last year's orders increased, and this is a reactionary decline. As a result of that, the Industrial Digital is 13%, 14%. Orders are very strong in both areas. Please refer to page eight.
The mother business is explained on this page. The bar graph at the top left-hand side is the first half comparing last year and this year. 13% shown here. This is adjusted EBITDA ratio. 13% is shown here. Under the revenue is JPY 79 billion, and there are four categories, and the breakdown is shown below. From the Digital Engineering, the system integration, connected products, and managed services respectively. Right-hand side should now be referred to from last year to this in terms of revenues. Last year was JPY 1,393 billion, and the forecast for this year is JPY 1.9 trillion. The ratio is increase of 36%.
Within the bar, the second from the bottom, above the gray, JPY 660 billion, is noteworthy, increasing by 60%. A very significant increase is shown here. Details are shown below. For GlobalLogic, it belonging to Digital Engineering, they have made a significant contribution. Please refer to the topics. GlobalLogic is contributing to many areas, driving the growth of the mother business. So far, I have talked about the second quarter. Next page onward, from page nine, I would like to talk about the first half. For the second quarter, more detailed information is provided from page 28. Here onward, I'm going to focus on the first half results. Please refer to page 10.
This is the highlight for the first half. Left-hand side is the revenues increase of 12% has been achieved. Looking at the bar graph below, the dark gray is the three sectors and Astemo. The light gray, on the other hand, is listed subsidiaries. You can see both have increased revenues. Right-hand side is the adjusted EBITDA and this has also increased as well. The breakdown is the same as for the revenues. On the right-hand side, the individual items are provided here. Overseas revenues was increased by 20% YoY. The core business is JPY 879 billion, increased by 54%, and netting at JPY 172.5 billion. This is a decline of JPY 149 billion.
This is because of the pension plan that have shifted as well as the goodwill impairment. EBITDA is also very similar. It is declining to JPY 557.5 billion. Cash flows from operating activities JPY 233.6 billion, which is increase of JPY 72.1 billion. Core operating cash flow is very important. Increase by JPY 60.2 billion to JPY 246 billion. For interim dividend, increase by JPY 10 from last year at JPY 70 per share. At today's board meeting, this has been approved. Next page, please. Results by three sectors, Astemo, and listed subsidiaries are shown here. Looking at the caption above, the three sectors had revenues and profit increase.
As you can see below, 111% for three sectors, and an increase by 22.4% for adjusted EBITDA. For Astemo, this was, you can see increase in revenues, but a decline by JPY 12.3 billion. Listed subsidiaries are shown on the right-hand side. Total consolidated basis is shown on the right-hand side for the first half. Page 12, please. This is the first half results by business segments. The very top is Digital Systems & Services. JPY 1,099.8 billion in terms of revenue. adjusted EBITDA was JPY 117.4 billion and 10.7% in terms of ratio. It looks different compared to the second quarter.
It is positive in terms of adjusted EBITDA. Front Business was minus 6.7%. IT Services was plus 2.1%. Services & Platforms plus 2.3%. Business-wise, so it looks mixed. Because of one-off factors, we have this result. Looking at Green Energy & Mobility next. JPY 1,071.5 billion. EBITDA was 45.8 on adjusted basis. Below, Hitachi Energy, JPY 630 billion, 36.9 billion, or ratio of 5.9%. As I mentioned, in the first half, it's 5.9%. On a full year basis, it will increase to 8%.
Below Railway Systems, adjusted EBITDA is 4.8% ratio. On page 21, I will give you more details. It is going to increase to 6.3%, showing recovery. The second quarter, first half, and the full year basis will look very different. Page 13. Connected Industries. Details are given here. JPY 1,027.7 billion, JPY 149.1 billion, and 10.4%. This has been very strong business for us. Looking at the Building Systems, adjusted EBITDA was 10% ratio. Smart Life and other home appliances, China's lockdown has impacted in terms of the second quarter at 8.9%. Hitachi High-Tech was 16%. Industrial Digital, 8.1%.
Water & Environment, 6.4%. Last year there was a major order, but there was a reaction decline this year. Industrial Products, 8.3%. In the full-year basis, it will look different, but this is the result for the first half. Overall 10.4% is the total ratio. Page 14. Here, let me give you the information regarding our subsidiaries. Astemo revenue was JPY 884 billion. Adjusted EBITDA was JPY 11.8 billion, 1.3%, very low. YoY business is shown on right-hand side. Adjusted EBITDA is negative. This is for the first half, but we'll have a strong recovery in the second half. On a full-year basis, the situation will look very different.
Down below, total is provided of JPY 5 trillion, JPY 416.7 billion, JPY 393 billion, and 7.3%. YoY basis, it's increased by JPY 20.6 billion . This is adjusted EBITDA, so this is the underlying trend of our company for the first half. In that sense, we have achieved increased revenues and earnings. Those were JPY 140 billion in terms of a non-operating basis, but this is because of the subsidiary sales as well as our consumer home appliance business being sold, resulting in decline, as well as the goodwill, as well as a shift to risk-sharing corporate pension plan has had an impact. Please refer to page 15.
At the top, our revenue, and below, adjusted EBITDA. From the first half of last fiscal year to the first half of this fiscal year, the flow is shown. Please have a look at revenues at the top. On the far left, the first half, our revenue, JPY 4,832 billion. There was impact from acquisition of GlobalLogic and Hitachi Construction Machinery is divested. There's negative impact from that. On the other hand, and as I will talk about this later, yen is cheap. Therefore, this has had an impact of pushing up our revenue. And we arrive at JPY 5,416 billion. The same with adjusted EBITDA, JPY 372.4 billion.
On the last acquisition of GlobalLogic, divestiture of HCM, foreign exchange JPY 46.5 billion. Revenue and adjusted EBITDA, the impact of Forex, is declining year after year. These are the numbers for this year, but as I will elaborate later, the impact of Forex with our structural reform, we're trying to neutralize that. Forex impact is declining. Then we arrive at JPY 393 billion in adjusted EBITDA for this year. Please have a look at the next page, financial position and cash flows briefly. At the top, our total assets. On the left, as of end of last fiscal year. In the middle column shown is total assets at the end of September of this year and change.
You can see that assets have come down, JPY 3,617 billion. That's because of divestiture of affiliates. Interest-bearing debt in the middle has also come down in association with that. Our ratios, please have a look at the bottom, D/E ratio. It has slightly improved. We have come close to 0.5, which we have been talking about, D/E ratio 0.51. Core free cash flow, which is the most important KPI.
24.6 billion. An improvement of 68.2. Revenue by market, clockwise North America, Europe, China, Japan, ASEAN, India, other areas. What I would like to look at is, in North America, YoY in the first half, up 35%. In the bracket, 15%. As is in the footnote, 15% is the net increase, excluding Forex impact. As you can see, in North America, net increase of 15%. There's increase in Europe as well. However, in China, if we net Forex impact, - 9%. Japan has been flat, no growth in either. ASEAN, India 21%, other areas 20%. Overseas revenues total JPY 3,513 billion, which is 65% of the total.
That is where we are at the end of the first half. Next page onward, I would like to offer the forecast for the full year. Please have a look at page 19. Revenue, we are expecting an increase YoY. On the right-hand side, adjusted EBITDA, we're expecting an increase in EBITDA as well. Increase in both our revenue and EBITDA, that is what we're expecting for the full year. On the right-hand side, adjusted EBITDA, there's a decline in subsidiaries. That is because of divestiture. On the right-hand side, you can see the profit items. Lumada, as I said, on a full year basis, JPY 1.9 trillion. Net income, JPY 600 billion, which remains unchanged. EBITDA, JPY 1.377 trillion. Cash flow from operating activities, JPY 690 billion.
That's down by roughly JPY 40 billion or JPY 39.9 billion. Because of divestiture of listed subsidiaries, so there's decline. Core free cash flow JPY 250 billion and ROIC 7.2%. It's down slightly. As a denominator, the capital has increased because of the GPN. With the impact of GPN and impact in profit because of divergence between the two, there's slight decline, 7.2%. Forex rate that I've been talking about, in the first half, we have looked at the actual rate. In the second half, JPY 130 is the rate that we set. Sensitivity is explained below.
In the second half, if the rate is JPY 150 to the dollar, then what would be the impact on revenue? Revenue will increase by JPY 170 billion. Adjusted EBITDA increase by JPY 10 billion. Next page, please. These are the details of the full year forecast. Page 20. Three sectors, Astemo, listed subsidiaries. On a full year basis, on the left-hand side, three sectors will see both increase in revenue as well as adjusted EBITDA. Astemo as well, increase in revenue and adjusted EBITDA. Well, in the first half, Astemo saw a decline in income, about YoY 103%. Adjusted EBITDA JPY 29.6 billion. Listed subsidiaries will be divested, so decline. The total on a consolidated basis JPY 600 billion remains unchanged.
Page 21 and onward, this shows the sectors and BUs. There are overlaps with the first half. Just to note increases and decreases. Digital Systems & Services Y-o-Y 106%, JPY 18.5 billion increase in revenue and income. Adjusted EBITDA ratio will go up to 13.1% and below. Front, 17%. IT Services, 12%. Services & Platforms, 9% + 9.5%. Green Energy & Mobility, 113%, JPY 66.6 billion increase in both revenue and income. So 6.9%, JPY 2.31 trillion. Hitachi Energy, JPY 1.31 trillion, 104.98%, on a full year basis. There is going to be a recovery.
Railway 6.3%. There will be recovery on a full year basis. Page 22, please. Connective Industries. This is on a full year basis. JPY 2.84 trillion. Adjusted EBITDA ratio 10.7%. Going all the way down, Building Systems 8.9%, adjusted EBITDA ratio. Domestic business is somehow behind, so it's down to 8.9%. But for all the others, Smart Life 10.2%, High-Tech 13.3%, Industrial Digital 11.2%, Water & Environment 10.4%, Industrial Products 10.2%. Very, very strong. Page 23, subsidiaries. Astemo at the top. On a full year basis, revenue JPY 1.85 trillion. Adjusted EBITDA JPY 92 billion. So it's back to 5%, adjusted EBITDA ratio.
Page 24. Just like the first half, Revenue and adjusted EBITDA is shown in trajectory comparing YoY. Have a look at revenues. The number last year and, right next to it, acquisition of GlobalLogic, impact thereof, and divestiture of HCM and Hitachi Metals, foreign exchange, and then, the end result. Adjusted EBITDA below shows the same evolution, acquisition of GlobalLogic, divestiture of HCM and Hitachi Metals, Forex, and others. There are some other costs. JPY 877 billion is the number for this year. Next, the factors affecting changes in net income attributable to the parent. Starting from adjusted EBITDA, to net income, the trajectory between the two is shown on the left-hand side, JPY 177 billion. Net gain of business reorganization, JPY 297 billion.
You can see structural reform and so forth, HCM, Hitachi Energy and so forth. Business reform, structural reform impairment is shown on the far right. The number remains the same at JPY 600 billion. Page 26. This was requested from before. On the left-hand side, second quarter only, in the middle of first half, on the right-hand side, full year. How has income evolved? Adjusted EBITDA in the middle, Q2 JPY 238 billion, and H1 JPY 393 billion. On a full-year basis, JPY 877 billion. You can see divestiture as well as structural reform impact. You will find the total number. All the other is for reference.
Second quarter only, numbers are on page 28, same listed subsidiaries. Pages 30 and 31, numbers by BU and segment, for the second quarter only. I'm sorry for being lengthy, but that concludes my presentation for now. Thank you very much for your attention.
Thank you very much. We might like to take questions. Those of you with questions, please utilize the Raise Hand button on the screen. We will call your name. When you are called, please unmute, state your name and affiliation, and ask your question. If you no longer wish to put forth a question, please release the Raise Hand button. We will not show the video of the person asking a question. We will take questions first from the media, and then take questions from the institutional investors, financial analysts, and take questions from the English channel as well. Let's take the questions from the media channel in Japanese first. Hirose-san, please unmute and ask your question.
First question. I hope you can hear me. I have two questions. First question is what you mentioned in the beginning. You said that there will be negative impact which is becoming more prevalent. The depth of the negative impact, well, if we go into recession, what is going to be the impact on your business? Furthermore, out of the negative factors, you have been able to nevertheless increase revenues and earnings. How do you evaluate your performance? That's the first question. A second question is the following. In China, the lockdown as well as political risk exist. How do you assess the geopolitical risk, especially in the context of the supply chain? It is likely that similar as this likely to occur.
How do you assess the risk, and how are you going to respond? Answer. Regarding the macroeconomic outlook, going forward, will be addressed first. The rate hike peak is not yet reached, and Frankfurt announcement is made. The U.S. is likely to have another rate hike. Therefore, from the end of year to next year, the interest rate it will be reaching a peak. Therefore, there's likely to be impact for the full year in fiscal year 2023. Macroeconomic will be in a declining period. We don't know if it's going to be in recession, but it's going to be negative, and that is likely to continue in fiscal year 2023. We are going to have to be very careful in managing our business.
This is the prevailing discussion within the management. This is likely to continue, the declining trend is likely to continue throughout the year in fiscal year 2023. Semiconductor shortage is likely to run its course. For fiscal year 2024, hopefully we hope that the economy, it will recover. But we still believe that fiscal 2023 is going to be very difficult. Now, how do we assess the increase in revenues as well as earnings? We have implemented various measures. That is the reason why we have the increase in revenues and earnings. The environment is very difficult, but we don't want to praise ourselves too much. I think we are quite satisfied with the result.
As a CFO, I have a positive evaluation. Now, regarding geopolitical risk, this is indeed very significant. Yeah, a thermal semiconductor and the PC board of the home appliance in this is being impacted because we are relying on China, near Shanghai. There were two significant lockdowns having an impact in these materials. Very significant opportunity cost was incurred. If this is likely to be going to occur again, we are going to deal with this with a contingency plan. We will try to find alternate routes in Japan in the short term. In the mid to long term, we have been engaged in discussions on how to deal with this in the future.
China, Taiwan risk will be taken into consideration as the U.S. is pushing friend-shoring for the supply chain. Friend-shoring will be considered. That will be included in our planning process going forward. Specifically, globalization was cheaper the better, procuring at low cost locations. Direction is changing now. Price is important, but supply chain stability is important. If not, it could be more important. Therefore, with the allies is where we should have the bases and also return to Japan. ASEAN could be a very promising, but they have strong relations with China, so we can't have everything situation in ASEAN. Domestic as well as low risk regions will be considered.
We are now contemplating the overall plan. We have returned some to Japan, and this is what we'll have to implement. About the general purpose products, we believe that we can still produce in China for the time being. Supply chain will be managed very carefully. We will have design and friend-shoring will be important theme for the second half and next year. That's all.
Thank you.
Thank you very much. Let's continue. Yamada-san, please, unmute and ask your questions.
Question. Can you hear me?
Yes, we can.
I'm sorry for asking a detailed question, but Digital Systems & Services, in some projects, there were cost overruns happening. Specifically, what kind of projects are they, and what's been the impact from the cost overruns?
I'd like to turn to Kato-san, my colleague, for an answer.
Yes. We have a customer, so we cannot really disclose the specifics. This is a project with a new technology applied, a very difficult project. A timeline was delayed, and because of that, a cost overrun has occurred. There's some things that have settled, so this is something that is temporary. Since before, we have been focusing on project management, but inclusive of resourcing, we would like to be thorough in containing the cost. Thank you.
Thank you.
Thank you very much. Hayakawa-san, please unmute and ask your questions.
Question. Can you hear me?
Well, your volume, your voice seems rather small. I'm sorry.
Can you hear me better now?
Yes, we can.
Apologies. Thank you very much for the presentation. A question. In terms of the effect of cheap yen, JPY 440 billion increase in revenue for the first half. Through structural reform, the impact from forex is declining. If you could, please elaborate on that. On the other hand, there are soaring material prices that continue. What is the good side and the bad side of the cheap yen? If you could please elaborate.
Kawamura wishes to answer, and the specific numbers will be followed up on by Kato-san if necessary. In the case of Japan automobile OEM manufacturers, half is still produced here in Japan, and they can benefit from the cheap yen. In our case, that's no longer the structure. The kind of operation where our products are made in Japan, exported overseas, that's not the case anymore for us. Most of our products are manufactured overseas and sold overseas. Sourcing is done mostly overseas. No three country relationship. In terms of forex, I think we're less neutral. For the past 10 years, we have been working to achieve that status with yen appreciation, the reverse impact could happen.
We have been working hard to make the impact from Forex neutral. This time, 60% of our business comes from overseas, so and income generated overseas, of course, has to be translated into JPY . Because of cheap yen, the number appears large. As you said, we source mostly overseas. JPY 4 trillion of sourcing is done in total. Not everything is overseas, but a lot. Semiconductor prices, material prices are up. If we look at the current status, so on a sample basis, on a consolidated basis, accounting impact and importation impact, the two are even against each other. How is the Forex rate going to fare? It's related to interest rate.
Forex rate is determined by two factors economically. One is domestic and overseas interest rate differential, and the second factor is prices. Prices are up in Japan of late, but compared to other countries, they're still low. In deflationary economy, the currency strengthens. Compared to the U.S., here in Japan, prices are not as up. There is still deflationary pressure that exists in Japan. The interest rate differential is very large, and yet yen is cheap. We don't really know what's going to happen with the interest rate policy, but that will impact the Forex rate between the JPY and the dollar. That is something that we need to think about and watch. Impact on JPN and our outlook, that is what I've just explained. If you would like to hear more specific numbers, I would like to turn to Kato-san. Would you like to hear those?
Oh, yes. Well, that was good. Thank you.
Kaneko-sama. Kaneko-san, please unmute and ask your question.
I hope you can hear me. Regarding prices, it's a related topic that I'd like to raise. First of all, for the first half, the resource prices is increasing, materials are increasing in terms of price, cost is increasing. Are you able to pass on the price increase? Are you going to continue to do this going forward? For next year, what is your take on the price going forward? BOJ has also given a forecast today. As a private sector company, how do you view the price inflation next year? Do you think that it will continue to increase, or do you think it is going to decrease? Thank you.
To go to your first question, regarding passing on the impact on the price, this is very important. We are now collecting data on this matter. The imports are getting higher, and the supply is very tight, and therefore, procurement cost is increasing. There are ups and downs, but depending on the product, about 10%-12% price is increasing in terms of procurement side. How can we pass on this increase is being tracked looking at statistics. About half is being passed on. 5%-6% is being passed on to the customers. About a half is yet to be done. For the overseas customers, we are able to pass on the price increase, but it is more difficult domestically in Japan.
In the second half, as well as for next year, we will make sure that we provide explanation to the customers. Because it's external cost, we hope that this burden can be shared with the customers. We will continue to provide explanation to our customers. That's the first question. To your second question regarding the outlook, going forward. In terms of purchasing and procurement, there are three products that are having a significant impact. First is semiconductor. Second is the steel plate. And third is copper and other metals. For semiconductors, we cannot be rest assured. Around the time last year, we thought that this is going to run its course.
The semiconductors for automotive systems is still very difficult. For high-end smartphones and for AI semiconductors, strong demand is now stabilizing. It is recovering somewhat, but it is likely to be difficult for the second half as well as the first half for next year, especially for automotive semiconductors. It isn't as if we can pay more and procure the product. It's a problem about availability. It's very difficult for us. From Texas Instruments and STMicroelectronics, products are having a very difficult semiconductor supply policy. The situation is likely to continue to be difficult. For steel plates as well as aluminum and copper, price is increasing, but there is availability.
Therefore, as already mentioned, we will try to pass on the increasing cost. The procurement cost degree. Inflation for nonmetal, non-ferrous metals are being impacted significantly. The approach is different compared to semiconductors. That is what we are doing.
This is Kato speaking. I wanted to give you some more information on this topic. Regarding the impact on the first half, in terms of procurement for materials, cost is increasing first half, JPY 55 billion for the first half. About JPY 60 billion in terms of market basis, but we have been able to negotiate better, to JPY 55 billion. That is being the impact for the first half.
I hope you are satisfied with the question. For next fiscal year, do you think it is going to continue or do you think it is going to stabilize next year? We are having difficulty hearing you. Can you repeat your question? For next fiscal year, do you think more than this fiscal year, do you think the price is going to increase further? Is that your outlook, or do you think it's going to run its course and stabilize? This is a company operation that we have to bear in mind, so we are looking at it product by product. For the steel plates, for example, JFE and Nippon Steel are making investment significantly. Therefore, when there is more availability, price is likely to recover.
For the copper as well as other products, the supply increase will mean that there will be stabilization. Therefore, for the second half, for steel plates as well as metal materials, metals is likely to peak. But for the semiconductor, we don't know. Especially for the legacy type of semiconductors, it is difficult to evaluate. So the likely scenario that will continue high, but whether it's going to go one step further is not the easy to foresee. Based on this outlook, we are making preparations for fiscal year 2023.
Thank you.
Thank you for the questions. Next, the institutional investors and analysts on the Japanese channel, if you have questions, please use the Raise Hand button. Yasui-san, please unmute and start your questions.
Hello, can you hear me?
Yes, we can. Thank you.
I would like to ask two questions. Question number one, the energy and mobility segment. In the first half, what's been the progress? What is your assessment of the progress made in this segment? You talked about order intake, but in terms of profit and loss, based on adjusted OP basis, JPY 14.8 billion against JPY 102 billion. There seems to be a lot of focus in the second half. Is this in line with the plan? This segment, I think, be it railway or transmission or distribution of electricity, has a large business in European operations. As energy costs go up, HR cost goes up. What is the visibility against JPY 102 billion?
Let me answer. As you rightly pointed out, Green Energy & Mobility centers around European operations, Hitachi Energy's power grid and railway. These are the two pillars of our business for this segment. For both, we have to develop infrastructure. Well, I'm the chairman of Hitachi Energy myself, and closely involved with the railway business. Just to give you the conclusion, second half will go as planned. This is about infrastructure demand. Funding is solid. Investors are public entities, local authorities, very solid. It's not subjected to market volatility. It proceeds as planned, more or less. For both Hitachi Energy and Railway, I'm sure the numbers that we have put out will be fulfilled, on track in line with the plan.
Kato speaking. Let me add some comments. In the second half, this is assessment based on our internal plan, but for Hitachi overall, revenue upside of JPY 100 billion, 2/3 of that come from Forex and JPY 35 billion, the remainder is organic growth. In terms of profit, JPY 20 billion upside, half of that comes from Forex, the remainder comes from organic growth. In the first half, upside mainly from listed subsidiaries, but Green Energy & Mobility segment, there's been organic growth as well as increase in operating income. Basically, it's on plan. That is our assessment.
Thank you.
Thank you. Let me move on to my second question. Connective Industries, segment.
In the first half, the Q2 numbers were quite good. Likewise in the second half.
What is the sustainability of your business? Can business be sustained? In the Q2 , I think, Hitachi High-Tech performed very well, but order intake was negative. It declined quite substantially YoY, although it was true that the business was good last year. What is the outlook of order intake and Building Systems and Smart Life? In the Q2 , it was good about Building Systems business in China. Given consumer demand trend, do you think the profitability can continue to increase into the second half?
Well, thank you for the question. Kato-san will give you the numbers and comments on Hitachi High-Tech orders.
In the first half, as he pointed out, Analytical Solutions orders were up YoY. Clinical analyzers, sequencers, they continue to benefit from recovery, YoY increase was seen. Nanotechnology Solutions on the other hand, semiconductor manufacturing equipment and inspection systems, in FY 2021, semiconductor manufacturers have placed their long-term orders to us. Of late, there's increase in revenue and income, but in terms of orders compared to last year, it's down. That is something that is relative compared to last fiscal year.
Thank you.
What you said toward the end, Smart Life, so home appliances, as was mentioned, problems in Shanghai. In the Q2, there was major recovery. In the Q1 , we were heavily affected by lockdown in Shanghai, while in the Q2 we brought manufacturing back, to Japan partly, so recovery was made. Without those factors, we believe that, we will be able, to be on plan. We have a JV overseas with, Arçelik. In the second half, we're not worried.
Kato speaking. I forgot to mention this. Full year outlook for Hitachi High-Tech on a full year basis, clinical analyzer, on an annual basis, there's recovery trend, so I think on a full year basis it will be flat. Nanotechnology business, the trend will continue from the first half, so YoY, there's likely to be a decline according to our outlook. Thank you. Thank you.
Next, Yasui-san, please unmute and ask your question.
I have three questions. The first question is regarding Automotive Systems. From the first quarter, there was a significant improvement, similar to the previous question. Good performance is likely to continue in the Q3 and Q4 . What is your take on that? That's my first question. I am also the Chairman of Astemo, so I am very much involved assessing the numbers and performance. In the Q3 and Q4 , we hope that there is going to be a significant improvement in operating profit. JPY 90 billion is the full year forecast. For the first half, we only did JPY 10 billion, so the remainder will be achieved in the second half, according to our plan. This is based on various assumptions. Semiconductor situation will have an impact.
From the OEM manufacturers, the orders coming in will have an impact as well. These are two variables that we have to deal with. Assuming it's fulfilled, we can achieve our numbers. If this seems difficult not for us to achieve this, there might be impact, but we have not changed the plan so far. Let me give you some numbers as well. The first half Astemo compared to previous year, 170% in terms of revenues increased. For the second half, 115%. We should see a similar growth in terms of revenues. In terms of profit, we have significant weight on the second half. There should be increased revenue in the second half.
The material cost increase is not being passed on into the price of our product. In the second half, we hope that we'll be able to offset that. Otherwise, fixed cost reduction is underway as well. Inclusive this, we hope that profit ratio can be improved for the second half. Question. JPY 9.66 billion. That's about JPY 480 billion if you divide by two. Second quarter business environment will continue, but in terms of the passing on the cost increase and cost reduction, we will—you are saying that you're able to turn around this business? Yes, that is correct. Question number two.
Regarding the nuclear power business, in 2019, with TEPCO and Chubu and Toshiba, together you have announced that you're going to discuss a reorganization. What is the progress made in this negotiation regarding nuclear power generation? The government policy is changing. You said that you're not going to do major projects. Has there been any change or progress made? Answer. To your question regarding TEPCO and our suppliers at Toshiba, and for the Higashi-Dori issue, we have been negotiating among the parties. There is no significant progress regarding the restart. As Shimane unit 2 and beyond that, Kashiwazaki-Kariwa number seven, are being discussed for restart. Investigation is underway for restart. We can't do this immediately.
We need the human resources and the standards will have to be evaluated once again. We are in that phase. It isn't as if a restart is going to be made and we are going to be involved immediately. Human resources as well as regulations and government policy will have an impact as well. Electric power intention will have an impact as well. Overall, we'll be coordinating and discussing the way forward. Question three. Similar to the previous question. For this year, I can understand that Europe is not a problem.
If there is a interest rate increasing and material costs increasing, foreign exchange having an impact, if that is the case, in terms of the power business, in the long term, the conditions could change significantly for your business. Are there any problems in terms of the contractual terms? I think the energy business is very strong for you. Do you think that the project will be impacted going forward? Answer. For Hitachi Energy, the board and the project review meetings are discussing that point. According to what I've heard, the projects are emerging in Europe in a certain manner. There is interest in client, and we are providing our proposal. With the macroeconomic environment, the impact could be felt.
With the interest rate increasing, the present value will have an impact. Therefore, the profitability of the project will be undermined. It depends on how much we can make a commitment to such a project. Interest rate going up, and if it continues to have an increase, then even if clients are interested, even if there's a request for proposal, we have to think about our criteria for investment as well as allocation of resources, we may have to decline. The interest rate environment from next year onward is going to be very important in Europe, especially for Germany. According to recent media reports, energy issues is occurring, and they could go into negative territory in terms of the economic growth.
Because the German economy will have an impact on overall European economy. It's part and parcel. Therefore, the interest rate as well as Germany's economy, the real economy, will have to be monitored very carefully. But for the time being, we are receiving requests for proposals from our customers. So we will consider how much we can respond to that depending on the resource allocation as well as the hurdle rate in terms of investment. A comprehensive evaluation will be made.
Thank you.
Thank you for the questions. Isawa-san, please unmute and ask your questions, please.
Yes. I would like to ask two questions. Somewhat detailed questions perhaps, but one question has to do with digital business, and second has to do with page 15, factors affecting increase and decrease of the performance. On the digital front, looking at a supplementary material, I have this question. Revenue overseas for digital business centers around GlobalLogic and growth in the U.S. is the major driver behind this business. Between the first quarter to the second quarter, a high growth has been enjoyed, but the growth rate seems to be dulling, coming down, it appears. Increased revenue in digital business in the U.S., is it correct to understand the growth rate is coming down for that business?
If that is true, then the impact from recession is starting to become manifest in your U.S. business. Is that the case? In Lumada or GlobalLogic business areas, there's something happening in those specific areas? What is the trend in North America with respect to your digital business?
If you could also state your second question as well.
Yes. Page 15. Factors behind increases and decreases and on the far right, others, -JPY 28.1 billion. In the first half, JPY 34 billion. In the second quarter only, it seems that there is going to be some positive number. In the second quarter, all the other factors are trending positive. Why? If you could please explain the breakdown.
Thank you for the questions. Regarding the digital business in North America, I would like to turn to Yoshikawa-san for an answer.
This is Yoshikawa speaking. Let me answer. As part of GlobalLogic PMI effort, Hitachi Vantara, a collaboration with Hitachi Vantara and other sectors, that is, steadily underway. Synergies are steadily underway.
With Hitachi Vantara, with respect to European financial institutions, digital marketing companies in the U.S., drug store chains, GlobalLogic has been acquiring orders from those companies, and they're recognizing revenue from that. On the energy front, Lumada's Enterprise Asset Management, so the direction at the time of acquisition was software to be offered to mining companies and others overseas. We're getting orders for that. Synergies as such have just begun, and as we showed in our medium-term business plan, GlobalLogic working with Hitachi's other OT and domain expertise, JPY 58 billion of synergies through M&A. Well, that's just begun. Synergies have just started, but actually it's already steadily underway.
That is something that I would like to note here. Storage business. In overseas maintenance, the services are down. There are some difficulties that we are experiencing. GlobalLogic business in North America, how can it be best commercialized? We're trying to renew the business and so forth. If the numbers appear in the way that you have understood, then perhaps that may be partly right. Well, just to add, Kawamura speaking. We can't disclose everything, but DX growth rate is a function of the number of engineers that we have. Globally, DX engineers are in shortage. Against that background, how can we strengthen our DX capability? We are actually discussing various ways of strengthening this.
There seems to be a dip, but next year and the year later, we're going to seek recovery. We're planning for that. There are strong demands from our customers, so the question is how many DX engineers can we allocate to those projects? That's the management challenge. Outside of the U.S. as well, we're trying to reinforce our staffing, and we're considering a number of measures for that. For Japan and others, I would like to turn to Kato-san for an explanation.
Waterfall chart on page 15, others. In the first quarter and the second quarter, there's been a great change. The scale of the business organically grew, and that is why that pushed up revenue and EBITDA too. Revenue of JPY 200 billion, income of JPY 55 billion, that's the difference, and that impact is very large in the Others segment.
Thank you.
Ishino-sama. Ishino-san, please unmute and ask your question.
No question. I have two questions, which is a follow-up question to the previous one regarding Astemo business. For the full year profit, you have outlined your thinking behind it. In terms of visibility, can you elaborate further? There's about JPY 100 billion what has gone down, but you have not revised. In the recent past, it is stabilizing, but it seems that do you have better visibility? Or revenue is increasing but profit is not following and for OEM manufacturers and other manufacturers in this area. But Astemo, for the Q3 and Q4 , you have an outlook of recovering. How can you convince us that it can be achieved? Building Systems. Real estate, the market in China, is slowing down for new construction. Considering next year, it could become more difficult. What is your outlook? Please elaborate.
Thank you. Answer. I would like to respond to Astemo, and Kato-san will respond to China. For Astemo, if we look at the breakdown, there are three profit pillars. One is the automobile, four-wheel, the gasoline engine type of product. With Honda, there is also the motorbike business. The third is the EV.
Regarding the motorbike is accounting for about half of the profitability of Astemo in Southeast Asia. Business is very strong. It is likely to continue in the Q3 and Q4 . The problem is the automobile, four-wheel, and the OEMs are in difficulty. For October and November, they cannot produce the vehicles. This is going to have an impact on Astemo business, obviously. For EV, electrification are this very small inverter and other areas are being invested in. We hope that this will continue to grow. Several years down the road, electrification, specification is where Astemo will be the strongest player. The four-wheel vehicles will have an impact on the Q3 and Q4 recovery of the Astemo business. With Honda and Nissan, we are trying to discuss how can we recover this business in the second half. Regarding the Building Systems, Kato-san, please.
First of all, in the first half, as you have rightly mentioned, in China, for overall increase in revenues and earnings have been achieved. But on a local basis, there's a decline in revenues and earnings, especially for new construction. It is declining for renewal and maintenance. This is increase in revenues and earnings, which is very strong. But overall, it's very difficult for the first half. Now, for the full year, the trend is similar for China. On yen basis, it is increase in revenues, but according to a local currency, it is declined.
Service business for buildings is very strong. That is the reason why it is pushing up the earnings. Now, regarding Astemo, your first question, let me also add the following. Not just limited to Astemo, but inflation as well as geopolitical risk and a shortage of semiconductors are risks that are very prevalent. As you can see on page 24, the full year forecast is included in the others. Global business risk adjusted EBITDA, JPY 10 billion is the buffer that we have included for this purpose. Regarding the buildings, I'd like to add the following. You, as companies are really making announcements in terms of what this market is quite difficult. However, overall it's a resilient platform.
If anything, I feel in this difficult environment. The decline in profit is not inferior compared to competitors. In margin mix is improving. In China, we have established a name, and now we are able to increase the price. That is not the case for our competition. Recently, a European company came out with results, and compared to their results, I think we are stronger in terms of pricing capability. Therefore, it is a reduction in revenues because of the foreign exchange. In terms of profitability, we are strong. Now to a previous question, I talked about the supply chain in China. I would like to emphasize that China remains a very important business base for us.
We have a business of JPY 1 trillion plus. We will take appropriate measures and make sure that we can generate the current revenues as well as profitability, not just because of not being impacted by short-term real estate market decline. We will take appropriate measures in China, so please do not misunderstand our outlook and business for China.
Thank you.
Those of you on the English channel, if you have questions, please use the hand raise button. Any questions for those of you on the English channel? There seems to be no hand. We still have some time left, so let's get back to the Japanese channel once again. Members of the press, institutional investors, analysts, anyone on the Japanese channel, if you have any questions, please, use the hand raise button. Iijima-san, please unmute and ask your questions.
Hello, can you hear me?
Yes, we can. Thank you.
Question. Because of my technical problem, I was not able to hear part of the questions and answers. I may be repeating some of the questions already asked. There are two questions that I would like to ask. Kawamura-san said that you have been working to make Forex impact neutral over time. But when do you think you will be able to completely neutralize the impact of Forex? Specifically, what kind of measures are you taking or will you take? That's my first question. Second, in the last earnings announcement, you talked about the discussion you were having to achieve the optimal capital structure. With respect to Hitachi Astemo, what is the status of that discussion? Answer.
Thank you very much for the questions. By what time do we think that we can achieve neutrality in terms of Forex impact? The answer is going to be very difficult. Well, business is ongoing. Investment overseas, investment done here in Japan, sourcing done overseas, and so forth. We have to look at all the factors as we look to contain the macroeconomic impact. As each business continues to be operated, it's very difficult to say when exactly. But 65% of business now comes from overseas. That has happened over the past decade, and Forex impact has been diminishing. I think it does require 10 years or so to contain the impact of Forex.
We're increasing local investment overseas, but then we're trying to procure from Japan more sometimes. This is the kind of initiative that would not be complete within one to two years. It will take five years or 10 years perhaps. We're talking about Forex. Well, at the current pace. Well, I cannot definitively say whether the yen will be cheaper. I'm not the currency authority. Sometimes it could be reversed, and we'll have to be prepared for that. We need to take a comprehensive view. This is the game that we need to be in for the next five to 10 years. Regarding the capital structure, we're still discussing that. Nothing that we can share with you at this moment.
We're taking into account a variety of factors. Automobile industry is having difficulty. Astemo is facing difficulty. We have to see recovery in performance. It also depends on the appetite of the investor community. From those points of view, we are discussing what to do with Astemo's capital structure. That would be all. Did that answer your questions?
Yes. Thank you.
The time has come to bring this meeting to a close. Thank you very much for attending the web conference for the results of fiscal year 2022, second