We would like to begin the financial results briefing of Mitsubishi Heavy Industries. Thank you for coming out of busy schedules. This is the financial results briefing for the second quarter of fiscal year 2017. My name is Nakamura from IR Group. I would like to introduce the participant, Mr. Koguchi, Executive Vice President and CFO. Mr. Koguchi will take you through the presentation, and that will be followed by a Q&A session.
Good afternoon. Thank you very much for coming to our financial results briefing for the second quarter of fiscal year 2017. My name is Koguchi, I am CFO. I would like to take you through the presentation material explaining the outline of the financial results for the second quarter of fiscal year 2017. Please go to page three. This is a summary of the first half financial results. For orders received, it was JPY 1,600.5 billion, which is a decrease of JPY 60 billion or so year-over-year. This is due to the MRJ orders in Aircraft, Defense & Space business, which didn't occur this year, although we did have it last year. Net sales was JPY 1.8254 trillion, which is an increase of JPY 70 billion year-over-year. Operating income is JPY 38.2 billion. There were more sales as well as expenses.
As for ordinary income, compared with the last year, there was an FX gain and income from equity method investment. We had some from Mitsubishi Motors last year, but it is out of the consolidation, so there was an improvement. Ordinary income, JPY 41.2 billion, an increase of JPY 43 billion year-over-year. Extraordinary gain and losses, we have a -JPY 4.7 billion related to business reorganization. After foreign exchange gain and income from equity method, net income was JPY 13.5 billion, an increase of JPY 32.4 billion year-over-year. EBITDA was JPY 129.2 billion, which is almost at the same level as the previous year. I'd like to take you through the breakdown by segment on the next page.
As for the orders received, as I said, because we didn't have MRJ orders this year, Aircraft, Defense & Space suffered from a decrease by JPY 40 billion, the other segments had more or less the same results. For sales, Industry & Infrastructure saw some increase, especially from mass and medium-lot manufactured machinery with turbo forklift and air conditioning and refrigeration system. We had some increase year-over-year. On the other hand, there was a decline in Power Systems. As for Aircraft, Defense & Space, we had an increase. As for operating income, as for Power Systems segment, as I said in the first quarter announcement, the nuclear power business operating income for the first half is negative or almost flat. In the second half, we are expecting a concentrated profit coming from nuclear business. That's the structure of the business.
In Power Systems, there was a decline of JPY 18 billion. Industry & Infrastructure saw an increase due to the mass and medium-lot manufactured machinery. For Aircraft, Defense & Space, because of the increase in investment of MRJ, but at the same time, there was an increase in the profit. We had about JPY 300 million for the first half. We would like to move on to the balance sheet on the next page. We are trying to reduce the balance sheet and trying to be more effective, and realize the cash flow positive. That's the basic policy of the company. For the second quarter, assets level was JPY 5,599.6 billion. With the MRJ investment, as well as the progress in the construction works of South Africa, there was an increase in the asset level for those purposes.
The total asset increased. On the liability side, versus last year, the increase in the balance sheet that I talked about earlier is covered up by the increase in interest-bearing debt. Interest-bearing debt is JPY 1,098.4 billion, which is an increase of JPY 172.8 billion from the end of the last fiscal year. Our cash flow has a bottom in the third quarter and increase in the fourth quarter. That's the seasonality. On a year-on-year basis, there was an improvement of about JPY 100 billion in interest-bearing debt.
The equity is increasing because of the profit as well as because of the recent rise in share prices. There was an appraisal gain from the share prices. Based on that, I'd like to talk about the balance sheet and the financial indicators. With regard to equity ratio, 32.8% was the number, relatively healthy trend. Year-on-year, 29.8%, there was an improvement year-on-year. Interest-bearing debt, as I said, in the year-on-year comparison, it declined. Debt-to-equity ratio is 0.51. To back up the cash flow, a status is shown at the bottom. As I said, our company's cash flow trends in the negative territory toward Q3, then Q4 it recovers. JPY -186.2 billion for the first half, but on a year-on-year basis, as I said, about JPY 30 billion increase was achieved.
With regard to the yearly forecast, JPY 100 billion is what we have. At the end of the third quarter, we'll see the bottom, then we are expecting to have recovery in Q4, and we are making preparations for that currently. Let me take a look at the orders received, sales, and profit by segment. Please turn to the next page. For orders received, in Aerospace, Aircraft, Defense & Space, it declined. In Power Systems and Industry & Infrastructure, there was a flat performance on a year-on-year basis. With regard to order backlog, it has significantly declined because previously MRJ order backlog was included in here, but delivery is now out in the future, specification and delivery timing is unclear. Incorporating this into order backlog is a question mark.
If you look at Boeing and Bombardier and other companies in the industry, they are excluding this from the backlog. Therefore, perhaps it's not wise to put this on the order backlog if delivery is further down the road. We have decided to exclude the one for MRJ. With regard to order backlog, orders received, you can see more details on page 16, including number of orders received. The sales, as you can see, in industry, especially mass and medium-lot manufactured machinery, it has increased. Next page, please. This is operating income. With regard to Power Systems, as I said, the nuclear business has had ups and downs. In this first quarter, it was declined, but it was offset by Industry & Infrastructure, so now we have the flat level in it.
For the nuclear business, we're expecting it to catch up by the end of this fiscal year. On a full year basis, we're expecting flat business. Based on the recent orders received, let me talk about full year forecast because we made some revisions. Please take a look at page 11. With regard to orders received, JPY 4 trillion 500 billion was the previous forecast, but it has reduced to JPY 4 trillion because of the Power Systems from JPY 1.95 trillion to JPY 1.45 trillion. There were two, three large-scale projects. Because of environmental assessment and financial closure, we are now clear that it will not be completed by the end of this fiscal year, so this was deferred to the next fiscal year. For the thermal power system, the market itself has been quite challenging and has continued to remain that way.
JPY 500 billion was reduced from orders received forecast for the Power Systems. Net sales, JPY 4.15 trillion was reduced down to JPY 4.05 trillion, down by JPY 100 billion because of the orders received for Power Systems, including those for the short term. Things were challenging, so net sales were reduced by JPY 100 billion. The operating income. Because of the recent developments, the forecast of JPY 230 billion was reduced to JPY 180 billion in forecast. Majority of this is accounted for by Power Systems, and JPY 141 billion was reduced to JPY 100 billion. Also, there was some trouble in the industry business. That was completed, and some cost increase was expected, and JPY 185 billion was reduced down to JPY 180 billion. In total, JPY 50 billion was reduced from operating income.
The ordinary income was reduced from JPY 210 billion to JPY 170 billion, net income from JPY 100 billion to JPY 80 billion, ROE from 5.5% to 4.4%, EBITDA, JPY 430 billion to JPY 370 billion. That was the downward revision. For free cash flow, there was some backup, including asset management, so we are expecting the flat forecast of JPY 100 billion. As for dividend, in the board of directors meeting today, we've decided to pay interim dividend. In the second half, there was an integration of the shares, but pre-integration, JPY 112 per share, and after the integration, JPY 120 per share for the yearly dividend. The segmental forecast for the Power Systems, orders received, net sales, and operating income, the forecast has been reduced and downward revision has been made. That's what I said, and that's all from my side. Thank you.