The scheduled time has arrived. We will now begin the Mitsubishi Electric fiscal year ending March 2027 second quarter earnings call. Now, I would like to introduce today's speaker, Executive Officer and CFO Kenichiro Fujimoto. Mr. Fujimoto, please go ahead.
This is Fujimoto of Mitsubishi Electric. Thank you for joining our financial results briefing today. Let me walk you through the overview of our consolidated results for the second quarter of fiscal 2027. Please refer to page four. Let me start with the key points. In the first half of FY 2027, surging procurement costs were largely contained by progress in price improvement. Strong demand for data centers, semiconductors, defense, and air conditioning also drove significant revenue growth across our businesses. Together with the results of our initiatives to improve profitability and efficiency, revenue reached JPY 3,125.1 billion, and adjusted operating profit, JPY 344.7 billion. Both were record highs for first halves. For the full year, we are revising our revenue forecast upwards by JPY 280 billion-JPY 6,550 billion, led by growth in FA Systems, air conditioning systems, and home products, and infrastructure.
We are also raising adjusted operating profit by JPY 90 billion to JPY 710 billion on larger volume and better profitability. That puts the adjusted operating margin at 10.8%, up 0.9 points from the previous forecast. Next, I would like to share with you two topics. First, as announced earlier, we will spin off the automotive equipment business and the low-voltage power distribution business within FA Systems. At the same time, we will make PCI Energy Solutions a wholly owned subsidiary. By advancing this portfolio strategy, we will accelerate business model transformation and further improve profitability and ROIC. Second, as announced today, we will repurchase up to JPY 200 billion of treasury shares. Together with the dividend forecast for this fiscal year announced in May, we expect a total payout ratio of 69%. We will continue to work on improving capital efficiency.
We also announced the interim dividend today, as forecast, JPY 30 per share. Page six. Here are the Group's first-half results. As I said, revenue rose 14% year-on-year to JPY 3,125.1 billion. This is a first-half record. Adjusted operating profit rose 69% to JPY 344.7 billion, also a first-half record. The adjusted operating margin improved 3.5 points to 11%. Net profit also has hit a first-half record. On page seven. In the second quarter, and from here onwards, let me refer to this as Q2. Revenue, adjusted operating profit, and net profit attributable to stockholders all set Q2 records. This waterfall chart shows the factors behind the year-on-year changes in first-half revenue and adjusted operating profit I have been alluded to. The weaker yen against the dollar, euro, and yuan, and other major currencies added JPY 137 billion to revenue and JPY 41 billion to profit.
Excluding currency effects, both revenue and adjusted operating profit increased. Volume grew mainly in FA Systems and further growth in data center and semiconductor demand, and in air conditioning on strong sales in Europe and Japan. Price improvements across our businesses also absorbed the higher procurement costs. On page nine. Now, the consolidated statement of financial position. Assets increased JPY 16 billion from the end of FY 2026. Inventories fell in FA Systems and air conditioning systems and home products on inventory optimization and higher sales. But they rose JPY 36.1 billion overall on volume growth and construction progress in build-to-order business. Liabilities decreased JPY 186.3 billion, mainly because accrued payables for the Next-Stage Support Program booked at the end of FY 2026 declined. Total equity increased JPY 202.3 billion. Equity attributable to stockholders rose JPY 211.7 billion to JPY 4 , 695.9 billion on net profit and other factors.
The ratio of this equity to total assets was 63.6%, up 2.8 points from end of FY 2026. Cash flows from operating activities were inflow of JPY 535.6 billion, up JPY 190.9 billion year-on-year on higher first-half net profit and other factors. Cash flows from investing activities were an outflow of JPY 172.2 billion, up JPY 125.5 billion on higher acquisition of property, plant, and equipment. As a result, free cash flow was an inflow of JPY 363.3 billion, up JPY 65.5 billion year-on-year. Now, the segment. Year-on-year revenue rose in all segments, and adjusted operating profit rose in all segments except digital innovation. I will go through each segment from the next page. Figures by sub-segment are on page 22 of the supplementary materials section.
Please turn to page 11. First, the infrastructure segment. In public utility systems, the domestic transportation business and the UPS business for overseas data centers performed solidly, and revenue exceeded the same period of last year. However, adjusted operating profit was down year-on-year basis due to absence of approximately JPY 5 billion in one-time revenue recorded last fiscal year. Next, energy systems. In North America, electricity demand is rising, leading to continued scale expansion of substation equipment. So, power T&D business is the main driver, which raised both revenue and adjusted operating profit above the same period of last year. To meet demand for substation equipment in North America, our U.S. subsidiary already increased production capacity by building a new plant. Particularly from second half of this fiscal year, production ramp-up will accelerate.
In defense and space systems, the demand in defense systems business is expanding, and space systems business is improving its profitability. Therefore, both revenue and adjusted operating profit exceeded the same period of last year. We will focus on eliminating the production load in the second half to ensure earnings while also working to build a system to accommodate increasing production. Please turn to page 12, the industry and mobility segment. Factory automation systems, FA Systems. Data center-related demand is driving the demand for machine tools and processing machines in China. Meanwhile, semiconductor-related demand is driving the demand for FA equipment in Japan and Taiwan. This has continued into Q2. Orders rose 48% year-on-year, and revenue also exceeded the same period of the previous year. Adjusted operating profit, with higher revenue, price improvements, and cost improvements exceeded the same period of last year.
To support further growth in scale, we are putting in place a production system in order to ensure we reap the results. Automotive equipment experienced lower revenue of car multimedia products. However, due to increase in Japan, North America, and elsewhere, revenue was up year-on-year basis. Adjusted operating profit, thanks to an improved revenue mix, price improvements, and cost improvements exceeded the same period of last year. Going forward, through joint operation with Foxconn, with which we have relationship that goes beyond that of OEM and supplier, we will leverage existing resources and accelerate the shift to EVs. Please turn to page 13. This is life segment. First, building systems. With domestic renewal business growing, both orders and revenue exceeded the same period of last year. Adjusted operating profit also exceeded last year. Air conditioning systems and home products enjoyed the effect of the weaker yen.
In addition, Europe experienced intense summer heat, air to water increased, and in Japan, ahead of the revision of energy efficient standards, the demand for air conditioner was solid. Revenue exceeded the same period of last year. As for adjusted operating profit, although procurement prices rose, this was offset by the weaker yen, increased scale, and price improvements. It increased year-on-year basis. Please turn to page 14. Digital innovation segment. System upgrades and DX implementation-related demand was solid. Therefore, orders and revenue exceeded the same period of last year. However, adjusted operating profit fell below last year. The acquisition of Nozomi Networks was recognized as one-time expense, and amortization of intangible assets was recorded. In the semiconductor and device segment, mainly for industrial applications, there was an increased demand for power semiconductors, and for data centers, demand for optical communication devices expanded.
Orders were higher than same period of last year. Mainly led by increasing optical communication device, revenue was up year-on-year, and adjusted operating profit also was higher than previous year, thanks to improved profitability from changes in revenue mix and price improvements. Let's go to page 15. This is revenue by location of customers. Regarding revenue from overseas customers, with increase of FA Systems in China and air conditioning equipment in Europe, it grew by 18% year on year. In Japan as well, the defense systems business grew, which increased revenue by 10% year on year. However, revenue from overseas customers grew faster, so the overseas revenue out of total consolidated revenue reached 55%, up 2 percentage points from the same period of last year. Please turn to page 17. Here is the full-year forecast for fiscal year ending March 2027.
Data center and semiconductor-related demand is expected to continue, which will lead to increase in the scale of FA Systems and profitability improvement. Increase in optical communication devices will drive profitability improvement in semiconductor and device. Based on revenue increase in the first half, full-year outlook of air conditioning systems and home products has been revised upward. In North America, ongoing demand for substation equipment shall lead to increased scale of energy systems. As a result, revenue compared to previous forecast is up JPY 280 billion at JPY 6,550 billion, adjusted operating profit up by JPY 90 billion at JPY 710 billion. For net income in the automotive equipment business, with conclusion of share transfer agreement, impairment loss is expected to be recognized. Therefore, the forecast is down by JPY 30 billion, now at JPY 465 billion.
For this new forecast, revenue and adjusted operating profit by segment can be found in the supplementary materials on page 24. That concludes my explanation.