Thank you very much for joining out of your busy schedule. It is time, we would like to begin the meeting for financial results for first quarter FY 2017. My name is Nakamura from the IR group, I would like to serve as moderator. Joining me is Mr. Koguchi, the Executive Vice President CFO. First of all, CFO Koguchi is going to give an explanation with regard to the financial results for first quarter, followed by question and answer. We are planning to have a question and answer for about one hour, we would like to close the meeting by 4:30 P.M. I would like to ask for your cooperation. Now, Mr. Koguchi is going to give the explanations with regard to the financial results for the first quarter 2017.
Good afternoon. My name is Koguchi. I'm in charge of the finance.
Thank you very much for coming out of your busy schedule. Please refer to the materials, because I'm going to give an explanation for the financial results for first quarter for fiscal year 2017 based on the materials. Please look at page one. First, the summary. As for the orders received, it's JPY 698.1 billion, which is a minus of JPY 226 billion on year-over-year. I am going to explain later on, but last year there had been a big order for the power. This year there was no big order. That is the main reason. For the net sales, JPY 888 billion. Increase by JPY 40 billion on year-on-year. Operating income was a little bit sluggish, which I'm going to explain later on. Power and the Power Systems were tentatively due the differences in the size of the nuclear power and the MRJ.
Comparing year-on-year, that the expenses for the research is increasing. That is why the operating income stands at JPY 16.1 billion. In first quarter in our company, we are going to start a little bit sluggish. Year-on-year, a decrease by JPY 8.7 billion. Ordinary income JPY 18.1 billion and net income JPY 4.4 billion. The ordinary income is more than operating income. One of the reason is because of the foreign exchange gain. Income from equity method investment increased. For the fiscal year, the foreign exchange, the income had the loss of about JPY 19 billion for the Mitsubishi Motors, that was a negative. However, now for this fiscal year, it went up on the positive side. That is why the ordinary income increased as well as net income. Looking at this by segment. First of all, Power Systems.
Orders received on a year-on-year basis, this was down by about JPY 150 billion. This is due to the timing of the deals included. I will explain later, but for Power Systems, the environment is relatively tough. For the net sales, it's more or less the same as the previous year. Operating income was JPY 600 million for Power Systems. This was low last year as well, but it is struggling mostly due to the nuclear power. Next line, Industry & Social Infrastructure. The order received was JPY 384 billion, down by JPY 15 billion, but generally a good trend. We are on page four right now. In terms of net sales, it was up by about JPY 50 billion, JPY 434 billion, and the operating income was JPY 16.1 billion. Aircraft, Defense and Space. Depending on how the defense projects come in, the orders received fluctuate.
It was JPY 86.4, down by JPY 59.4 billion, net sales was JPY 160 billion, which was basically the same as last year. There were some expenses increase, the Tier 1 cost reduction is progressing. All in all, we ended this business line in a positive number. Based on that, orders received and net sales add up to the numbers that I mentioned in the previous page. On the next page five, you can see the balance sheet. As for the balance sheet, the basic idea is trying to compress.
Compared to the previous fiscal year-end, there was an increase of about JPY 42 billion. South African project continued to progress, for Hitachi, we have the right to invoice or charge, this value is increasing. In terms of inventories, some inventory buildup in the beginning of the fiscal year happened. We do not believe it is a good idea to have a high level of inventory, we need to make further effort to compress the inventory. Excluding the South African project issue, more or less all the numbers are basically the same as the previous year. Moving on to the second half of this slide, there is cash flow. Operating cash flow, JPY 79.2 billion negative, this is page six, free cash flow is negative JPY 115 billion, the investment cash flow was a minus JPY 36 billion. The cash flow tends to be negative in this quarter.
The investment is decreasing, the free cash flow is more or less the same as the previous year, just up by JPY 9 billion or so. For the full year forecast, JPY 100 billion is planned, this had not changed from the last time. Interest-bearing debts. While free cash flow was approximately JPY 100 billion negative. On a year-on-year comparison, this was JPY 1.042 trillion. The balance sheet, PL, cash flow, putting them all together, we have the equity ratio, which is one of the main financial measures, which ended up at 32.3%, which is more or less the same as the previous year. We have seen slight improvement. The equity ratio was 0.49, which also showed a slight improvement on a year-on-year basis. I have talked about the free cash flow, JPY 100 billion positive.
We will continue to maintain this number because the situation has not really changed from the previous forecast. We have not really changed the forecast for the interest-bearing debt, which is JPY 580 billion.
Page seven, please. I would like to explain by segment about for the orders received, it decreased about JPY 220 billion. Please look at the orange portion to see the root causes, that is because of the large-scale plant order was less compared to the previous year. The green portion, I&I, the Industry & Infrastructure, relatively speaking, it had a smooth going. That is what we thought. As for the commercial ships, there had been no order for this fiscal year. However, it seems that the Metals Machinery hit already the bottom and is likely to increase, also the turbochargers show some increase, so that compensated the commercial ships. As for the Aircraft, Defense & Space, it depends on how the orders will be received. Through the year, it seems that there is no particular problem.
The order backlog, well, the orders received is about the same, the order backlog is decreased, because it does not include the mass-manufactured product. The green one, if you plus about JPY 1 trillion, I think you will be able to get the total picture. For the net sales by segment, it is as shown here on this slide, page eight, there is no specific things to be noted. If you can look at this page eight, I think you will be able to understand, that the order related to the Metals Machinery is recovering. However, in the past, it was very tough. In terms of the sales, it is still on decrease. The Metals Machinery, well, there had been some expenses reduction.
However, because of the Metals Machinery hit the bottom in the orders, we hope that we will be able to see recover. However, for this fiscal year, still the sales is impacting negatively. Next is on page nine, which is the operating income by segment, you can see that the orange Power Systems has decreased largely. Well, the absolute number is very low, the impact is not so large, even though the operating income on orange part seems to have decreased greatly. There is a recovery, there is not so much concern. The green portion, which is Industry & Infrastructure, is about the same, like previous year. The Aircraft, Defense & Space, the Mitsubishi Regional Jet development cost in a whole year, there seems to be a tendency of minus. However, compared to the 4Q, well, it is decreasing.
However, year-on-year compared to the first quarter previous year, it is about the same. From that, page 10.
Page 11, the summary of forecast. First quarter usually sees low sales and low orders. Based on the explanation that I have given, we do not believe that any major changes happened from the beginning of the year when we made the plan, we decided to keep the numbers as they are. Orders received, JPY 4.5 trillion, net sales, JPY 4.1 trillion, operating income, JPY 230 billion, ordinary income, JPY 210 billion, and free cash flow, JPY 100 billion, and dividend, JPY 12. You can see the segments divided on the next page, and they will stay the same as well. Because of the business reconfiguration, based on the most current segment, we had to reallocate some of these numbers from the previous year. That concludes my brief explanation of the Q1 result.