Hello, everyone. I am Nishio. I am the CFO. Thank you so much for participating today. Today I will speak about our Q1 FY 2025 financial results and the FY 2025 earnings forecast, followed by some supplemental information about U.S. tariffs. The materials have been released in advance of today's briefing, so I will omit an explanation of each slide while focusing on the main points and supplemental information. Now, first, look at slide four. I would like to provide an overview of our financial results. Please refer to the slide which outlines our financial results in terms of our main KPIs. Order intake was JPY 1,768.6 billion, with orders increasing in energy systems and plants and infrastructure systems. The overall volume decreased slightly due to a decline in defense and space, which booked several large orders in Q1 FY 2024, but continued to maintain a high level.
Although not shown on slide four, order backlog was JPY 10,772.9 billion, an increase of about JPY 500 billion from the end of FY 2024. Revenue increased by 7% to JPY 1,193.6 billion. This was a record high for our first quarter. Business profit reached the JPY 100 billion mark. This was a 25% year-over-year and also a record high for our first quarter. Net income increased by year-over-year to JPY 68.2 billion. Although this is small compared to the growth in business income, we recorded a foreign exchange gain of approximately JPY 20 billion in Q1 FY 2024 when the yen depreciated significantly. The low growth rate was due to this. Net income also reached a record high. Next, let us go to slide seven. Please refer to free cash flow shown at the bottom of slide seven.
Free cash flow was JPY 64.3 billion, of which operating cash flow was JPY 89.6 billion. This was mainly due to an increase in advances received on the back of strong order intake, particularly in GTCC (Gas Turbine Combined Cycle). Slide eight. This shows the balance sheet. Total assets were JPY 6,752 billion, an increase of JPY 93.1 billion from the end of FY 2024. Inventories and other current assets, including advances, increased due to business expansion in GTCC, defense, and other businesses. Conversely, working capital decreased slightly in Q1 due to the large amount of advances received or contract liabilities booked on the liability side. As a result, the balance of interest-bearing debt was JPY 650.3 billion, the same level as the end of FY 2024. Net interest-bearing debt, which excludes cash and cash equivalents on the asset side, decreased to -JPY 21.4 billion. Slide nine.
Slide nine shows a waterfall chart outlining year-over-year changes in business profit. When you look at revenue gains and margin improvements, there's an improvement of JPY 33 billion. Energy and infrastructure systems and aircraft, defense, and space each improved close to JPY 10 billion compared to the previous fiscal period. There's also a currency impact, foreign exchange impact of -JPY 6 billion. The average exchange rate for revenue recognition was JPY 153 to the dollar in Q1 FY 2024 and JPY 146 in Q1 FY 2025. This is due to it. No one-time expenses were recorded in either period. It's that on this step chart. On the next slide, which shows the breakdown, we will show the breakdown of operating segment in the following pages. Slide ten shows the breakdown of order intake, revenue, and business profit by segment. I will go to slide 11, which shows energy segment.
Order intake, revenue, and business profit year-over-year. The rate of progress versus the full year forecast was also steady. GTCC booked strong order intake in North America. Revenue and business profits also increased in steam power and nuclear power. Orders were strong, and both revenue and business profit were stable.
Go to slide 12. This is plants and infrastructure systems. Order intake, revenue, and business profit all year-over-year, and the rate of the progress against annual forecast is steady. In engineering, orders were brisk, mainly due to the replacement of old transportation facilities. In metals machinery, sales and profit both increased despite a decrease in orders. In machinery systems, orders, sales, and profit also increased. Going to slide 13. In logistics and thermal and drive systems, order intake, revenue, and business profit all year-over-year. In engines, both orders and sales were strong, mainly in Asia, and business profit increased. Going to slide 14. In aircraft, defense, and space, as I mentioned at the beginning, order intake in defense decreased due to several large projects booked in Q1 FY 2024, but a high level exceeding revenue was maintained.
Both revenue and business profit increased due to the steady progress in project execution. Commercial aviation revenue and business profit also increased due to an increase in the number of Boeing 787 unit deliveries, despite the impact of the stronger yen. As I described previously, our results in the first quarter overall marked a strong start to FY 2025, and I believe that we are generally on track to achieve our 2024 medium-term business plan targets. Order intake was stronger than expected. Regarding the impact of U.S. tariffs, which I will explain later, the direct impact from tariffs on the Q1 P&L was immaterial, in the tune of several hundreds to millions of yen. Please go to slide 16. Next, I will speak about our FY 2025 earnings forecast. The figures shown here are unchanged from our announcement in May.
The exchange rate assumption remains at 145 yen to the dollar. Exposure to foreign exchange risk in terms of business profit is $2.3 billion. Going to the breakdown by segment, this is also unchanged from the announcement in May. The JPY 240 billion business profit target in energy systems includes a JPY 20 billion risk buffer for one-time expenses. As I would like to touch upon tariffs, please go back to slide 15. As shown on page 15, indicated in the underlying text on page 15, we are working on cost pass-throughs, and the number of transactions subject to tariffs is not large in the first place. Therefore, in this context, please allow me to briefly introduce MHI Group's business activities in the U.S. Please refer to page 22 at the end of the presentation materials.
First of all, in terms of volume, revenue in the U.S. was JPY 1.1 trillion in FY 2024. This includes direct export transactions from Japan to U.S. customers, as well as transactions within the United States. Major direct export transactions are in commercial aviation, aero structures, and for Boeing tier one business and aero engines. Our customers paid the tariffs in these cases. Other transactions are within the United States. As shown on this map, MHI Group has local manufacturing service bases for GTCC, forklifts, aircraft, compressors, next-generation transportation systems, metals machinery, corrugated machinery, and other products. The volume of transactions for which we are responsible for tariffs is not large. That said, some components, such as for GTCC and forklifts, are imported from our Japanese bases by our U.S. group companies, and the duties for these products are borne for a time by our group.
However, we believe that P&L impact can be controlled to a considerable extent by passing on these costs to our customers. With this, I would like to conclude my presentation.