Good day, ladies and gentlemen. My name is Hashimoto. I am the president of Kawasaki. Thank you very much for participating in earnings conference in spite of your busy schedule. I will first explain the summary results of FY 2021, and the outlook of the new fiscal year before handing over to Vice President Mr. Yamamoto. He will explain the earnings of the past year and the projections of the new fiscal year. Then Mr. Yamamoto and I would like to answer your questions later. On the first day of October in 2021, we launched two new companies in motorcycle and rolling stock businesses, Kawasaki Motors and Kawasaki Railcar Manufacturing. The motorcycle business made a record profit by taking right actions based on agile decision-making on the wave of robust demand, in spite of challenges like supply disruption and shortages.
The Rolling Stock segment successfully improved management through spin-off and made profit again for the first time in five years. We made progress in many aspects of hydrogen business, which will become the core of the company in the future. The ongoing Japan-Australia hydrogen supply chain demonstration successfully completed a voyage to and from the two countries carrying liquefied hydrogen aboard Suiso Frontier. The ship was built by Kawasaki. One of great outcomes was award of about JPY 260 billion in subsidy from NEDO's Green Innovation Fund to demonstrate commercial viability. We introduced a new HR system last fiscal year, under which the corporate culture is gradually becoming to embrace a challenger spirit. This is a summary of the past year. The February earnings forecast was revised upward, partly thanks to depreciation of the Japanese yen toward the end of the year.
We plan to raise year-end dividend from JPY 10-JPY 20, distributing the full year dividend of JPY 40 in total. Vice President Yamamoto will talk about FY 2022 in detail later. We expect that both sales and profit will grow year-on-year, and the dividend payment will be JPY 50 per share. As we planned in Group Vision 2030, the primary sources of earnings will be mass production businesses like motorcycles and Precision Machinery and Robot. Order-based businesses, like Aerospace Systems, will return to profit as the aviation demand recovers. Our profitability will slowly recover while our future business of hydrogen is making steady progress. On the other hand, the soaring of resource prices triggered by Russia's invasion of Ukraine and the COVID-19 impact still cast uncertainty over the global economy. We will take right actions at the right time.
At the same time, we will continue business portfolio reforms as we declared in Group Vision 2030, in order to achieve margin level of 5%-8% and a ROIC level of a capital cost of +3% or more as soon as possible. I would like to ask for your continued support.
Thank you for listening. I'm Yamamoto. Thank you very much for coming. As the company disclosed at 11:30 today at the Tokyo Stock Exchange and on the company website, the FY 2021 full year performance has improved considerably year-on-year, driven by strong Motorcycle & Engine businesses, while Aerospace Systems business is finally coming out of COVID-19 impact. The Japanese yen at the end of the term was weaker than the February outlook. We ended FY 2021 with recurring and the net profits being much higher than the plans.
We will increase the year-end dividend to JPY 20, adding JPY 10 to the previous plan. FY 2022 has uncertainty in external environments, but the impact of COVID-19 is steadily decreasing, and we revised the rate assumption of the Japanese yen to JPY 120, considering the most recent foreign exchange rate, about JPY 8 lower against the dollar than the weighted average rate of the past year. All said, we expect a growth in net sales and income in every segment. This is a summary. From page three, I will explain more details. Page three, please. We ended FY 2021 with a net sales of JPY 1.5008 trillion. The OP was JPY 45.8 billion. The recurring profit was JPY 29.9 billion, and the net income attributable to owners of a parent was JPY 21.8 billion.
The year's weighted average exchange rate of Japanese yen was 111.9 JPY, about 7 JPY lower than last year. The value of US dollar-based transactions was $1.76 billion. Page four, please. This page shows orders received, net sales, and operating profit by segment. As you see in box number one, the Aerospace Systems showed a dramatic improvement as passenger demand has returned. As indicated by box number two, the Motorcycle & Engine segment substantially grew in sales and profit, driven by strong demand for outdoor leisure in the developed countries. Energy Solution & Marine Engineering segment saw a big dip in profit year-on-year, mainly because the fourth quarter recognized loss again due to steel price increase. On the other hand, the Rolling Stock segment made a profit for the first time in five years.
As a result, the year ended with net sales of JPY 1,500.8 billion, up by JPY 12.3 billion. The operating profit increased JPY 51.1 billion to JPY 45.8 billion. Page five, income statement. Please look at the table for details. As the net sales grew considerably in motorcycle and engine business, the sales cost grew accordingly, as you see in the box number one. The foreign exchange gain in the non-operating income section was much bigger than the last earnings report, but the full year gain was small as the company had large exposure to US dollar-denominated liabilities. Regarding equity and income of unconsolidated subsidiaries and affiliates, the company made loss of JPY 14.4 billion for the reasons indicated in the note number three.
Higher steel prices and the appreciation of the yuan deteriorated shipbuilding profitability in China as the contracts were denominated in U.S. dollar. Furthermore, the material cost hikes led to higher marine equipment cost. The recurring profit was JPY 29.9 billion, up JPY 32.7 billion year-on-year. Page six, please. Next, I would like to explain incomes below recurring profit. This year didn't make big extraordinary losses compared to last year and made a strong turnaround from the last year's deficit. The net income was JPY 21.8 billion. Page seven, please. I will explain the factors contributing to changes in profit. The exchange rate of Japanese yen was lower than last year, creating a positive impact of JPY 22.5 billion. Motorcycle & Engine made big contribution to changes in sales.
Jet engine maintenance cost, which was a major burden in FY 2020, decreased. Please refer to page eight for more details by segment. Page nine, please. Balance sheet. As noted by number one and three, some adjustments across accounts were made as a result of application of new accounting standard for revenue recognition. As we noted in comment number two, a big part of positive change in other non-current assets is due to the increased advance payment and accounts receivable in Aero Engine as a result of the application of the accounting standard for revenue recognition. Page 10, liabilities and net assets in the balance sheet. Liabilities and net assets changed driven by better performance and advance receipt of contractual liability in Aerospace segment, as noted in comment number two. As a result, there was a progress in repayment of borrowing, as noted in one.
The net D/E ratio was 80.7, meeting the target level. We will continue to accelerate collection of accounts receivable, control inventory assets, and improve asset efficiency in FY 2022. Page eleven. Page eleven shows cash flows. The cash flow from operating activities increased by JPY 109.8 billion YOY to JPY 144.4 billion, partly thanks to the growth in advances received. The cash flow from investing activities was less than last year because last year earned proceeds from the sale of fixed assets. Excluding these special factors, the change is not material. The total free cash flow was positive, JPY 91 billion, JPY 94.6 billion from last year. Page twelve. Page twelve shows historical cash flows over the past 10 years for your information. Page thirteen. Earnings forecast for FY 2022.
The company starts to implement International Financial Reporting Standards from FY 2022. The new format will disclose operating profit and recurring profit as business profit. Business profit will include equity in income of unconsolidated subsidiaries and affiliates, extraordinary income losses, and other non-operating income expenses. To ensure comparability with the previous year, we will continue disclosure of operating profit and recurring profit under the JGAAP in parallel. Now, forecast for FY 2022. We expect orders received will go down to JPY 1,530 billion, down JPY 32.1 billion from last year. The net sales forecast is JPY 1,680 billion, up JPY 179.2 billion. The OP forecast is JPY 61 billion, up JPY 15.2 billion.
The recurring profit will be JPY 47 billion, up by JPY 17.1 billion, and the net income is projected to grow to JPY 29 billion, up by JPY 7.2 billion. The business profit under the IFRS will be JPY 53 billion. The impact of higher prices of resources and materials became meaningful from the fourth quarter of FY 2021. In FY 2022, expect to achieve sales and a profit growth driven by depreciation of Japanese yen and by passing the cost hikes to our product prices. The new foreign exchange assumption is 120 yen, about eight yen cheaper than the actual rate of the past year. Page 14. Forecast for FY 2021 by segment is shown in the table. I will go into more details in segment specific slides. Aerospace Systems returned to profit.
Motorcycle & Engine is expected to make another record year of a profit following the last year. The increase in Eliminations and Corporate is primarily due to strategic spend, such as company-wide IT infrastructure build and DX digital transformation. Page 15, Aerospace Systems. Orders received increased due to an increase in component parts for Ministry of Defense and Boeing, despite a decrease in commercial aircraft jet engines caused by the application of a new accounting standard for revenue recognition. The net sales were down due to slow business with Boeing and Ministry of Defense and the application of the revenue recognition accounting standard. The operating profit was impacted by smaller revenue that grew significantly due to improvement in profitability of jet engines for Boeing and commercial aircraft.
The FY 2022 is expected to receive fewer orders than last year, as last year had particularly enjoyed large orders from Ministry of Defense. Both net sales and operating profit are likely to grow because commercial aircraft jet engine profitability will improve due to recovery of flight hours. We expect this segment to welcome back to profit. Page 16. This slide shows orders received and net sales of aerospace and aero engines separately. You will also find the number of aircraft component parts sold to Boeing and the number of jet engine component parts sold in the tables. Page 17, please. Aerospace Systems. This page shows the quarterly net sales and operating income to help you understand the historical trend. Page 18, please. This page describes our market overview, including business environments and order trend, as well as specific efforts to achieve the targets.
There is no substantial change since last presentation. We anticipate that it will take a considerable time before the market environments return to pre-pandemic levels. The company continues to save production costs and to review the fixed cost structure rigorously to cope with the changes in business environments. Page 19, please. Rolling Stock segment. This slide shows the performance of FY 2021. Compared to FY 2020, when the company had enjoyed major orders for Shinkansen, this year saw a fall in orders received. The sales were a little slow, but we improved profitability, and the segment turned profitable for the first time in five years, as was planned, driven by higher profitability of overseas projects as the pandemic is declining. The FY 2022 is projected to grow orders received due to an increase in rolling stock for Japan.
We plan to increase net sales, especially from US projects carried over from the last year, and OP will remain at the same level as the last year. Page 20, please. This page shows orders received and net sales in domestic and Asia, as well as North America. For your information, we included in the appendix sales from a high margin after sales service and an update on M1 project for Long Island Rail Road in the United States. Page 21. This page shows the quarterly trend of net sales and operating income for your information. Page 22. Like the Aerospace Systems, market overview of the Rolling Stock segment has not changed since last time. Under specific efforts, I updated delivery schedules for overseas projects for your information. Next, page 23, Energy Solution & Marine Engineering segment. This slide shows the results of FY 2021.
Orders received went up due to orders for domestic municipal waste incineration plants and other projects. Net sales went down due to a decrease in construction work for Ministry of Defense submarines and a decrease in a power plant project. The operating profit deteriorated due to a decrease in revenue for these reasons, as well as provisioning for construction work loss as a result of soaring costs in ship business. The FY 2022 forecast expects increased orders from Ministry of Defense in ship and offshore, but plant engineering will slow down. Therefore, the total orders received will remain at the same level. Net sales is expected to grow due to an increase in energy system and an increase in construction works in ship and offshore.
We forecast the OP will reach JPY 2.5 billion, up by JPY 1.4 billion, as we expect profitability improvement in ship and offshore after making a loss in the previous year due to steel price hike. Page 24, please. This page shows orders received and in net sales by segment, namely Energy Solution & Marine Engineering and the Ship & Offshore Structure. Page 25. This page shows a quarterly trend of net sales and operating income for your information. Page 26. This page shows the market overview and order trend of this segment. The top priority is to improve profitability by promoting energy and environment solutions. The company is particularly focused on overseas project growth. For your information, I included the orders awarded outside Japan in FY 2021.
The company is focused on establishing a leading position in the decarbonization field in the mid to long term. We are well-positioned to develop technology for hydrogen energy society. For your information, I included some technologies under development. Page 27, Precision Machinery and Robot segment. The slide shows the results of FY 2021. Orders received, net sales, and operating profit all increased, driven by increase in various robots, including robots for semiconductor manufacturing equipment, and thanks to a depreciation of Japanese yen. As to FY 2022 forecast, the orders received will increase, driven by remarkable recovery of construction machine market in developed countries. Net sales and OP are expected to increase due to an increase in hydraulic components for construction machinery market in developed countries and general robots for industrial use. Page 28.
This page shows orders received and net sales of hydraulic components and systems and robotics. We added sales of hydraulic components to China and sales of robots by segment. Page 29, please. This page shows the quarterly trend of net sales and operating income. Page 30. It shows market overview and specific efforts of this segment. Among specific efforts is automation technology for construction machinery. This fiscal year, we added one more, development of hydrogen-related products for decarbonized societies. We expect a stronger demand for hydrogen gas valves, hydrogen supply system, and hydraulic hydrogen compressors. Through their development, we will contribute to realization of a hydrogen society. To promote open innovation, we developed Nyokkey, an autonomous service robot with two arms as a platform for service industry. Partners are able to develop application software freely on the platforms provided by Kawasaki.
We will capture the trend of robotics adoption in the service industry. This robot is already serving meals at a restaurant in Future Lab Haneda next to Haneda Airport. Please take time to drop in and have a look. Page 31, Motorcycle & Engine segment. This slide shows the results of FY 2021. Sales grew due to an increase in motorcycles for North America, Europe, and Southeast Asia, and an increase in general purpose engines. The profit gain was also driven by cheap Japanese yen. The company made a record operating profit of JPY 37.3 billion. Regarding the FY 2022 forecast, we expect net sales growth by stable production as the market continues to be strong and the inventory level stays low. The operating profit is still under pressure of soaring material costs and supply disruption, but we will absorb rising costs through price increases.
Cheap Japanese yen is also positive for profitability. We forecast the OP to reach another record high consecutively at JPY 45 billion, up by JPY 7.7 billion. Page 32. This page shows net sales and operating profit by sub-segment, namely motorcycles for developed countries, motorcycles for emerging markets, utility vehicles, ATVs, and PWC, and general purpose gasoline engines. There's information regarding wholesale of motorcycles by country. Page 33. This page shows the quarterly trend of net sales and operating income. Next, page 34. Here is market overview of motorcycle and engine segment for your information. Page 35. Shareholder return. As President Hashimoto said earlier, the year-end dividend will be JPY 20. JPY 10 higher, making the full year dividend JPY 40. Dividend for FY 2022 will be JPY 50 per share according to our dividend policy. Page 36.
Here, I would like to report four project topics, today from this page. First, I would like to give you an update on hydrogen business. This is expected to become the growth pillar in the mid to long term. At the end of last year, the world's first liquefied hydrogen carrier, Suiso Frontier, sailed from Kobe Port to Australia. Liquefied hydrogen had been loaded before the departure. The objective was to demonstrate the viability of loading and a maritime transport of liquefied hydrogen and structural integrity of tanks and piping. The pilot project performance was successfully demonstrated. The ship returned from Australia on February 25. The demonstration proved it's possible to establish international liquefied hydrogen supply chain. Furthermore, we believe that various technologies and know-how we acquired through the demo will be a game changer in the clean energy business going forward.
As a global leader of hydrogen supply chain technology, next, through hydrogen supply chain commercialization and demo program, which was adopted by Green Innovation Fund, we want to celebrate our effort to create a society where hydrogen energy is easily accessible and usable to anyone. Page 37. Page 37 is about start of collaboration with Airbus to promote use of hydrogen at domestic airports. Today, hydrogen fuel is under consideration for airplanes in order to achieve a decarbonized society. Against this background, we signed memorandum of understanding with Airbus to jointly study establishment of hydrogen supply chain in different stages, covering production, transport to airports, and fueling to aircraft. We will jointly make a roadmap to address challenges and advocacy plans on hydrogen use for aviation. We will also make infrastructural plans to deliver hydrogen to selected domestic airports. Page 38, please.
This page is about growth in PCR viral testing business. We tested about 400,000 samples in FY 2021. In 2022, we aim to quadruple the number of tests from the past year to 1.6 million. The growth will be driven by testing services for international passengers at airports. We will contribute to recovery of a traveler demand. At the same time, the service business knowhow we acquire through PCR testing services will be put to use company-wide. This way, we can increase the share of revenue from service sale, and this will add to the total earnings. Page 39, please. This is the last project topic. iPNT-K business sells indoor location information service. It is brand new and completely different from our company's traditional business models.
Today, GPS-based location information is used in all sorts of services, but the location data lose accuracy pretty much in the buildings. It is difficult to locate even which floor you are in. In cooperation with a partner, we developed a technology to utilize indoor radio wave to locate positions in buildings without special dedicated equipment. This technology does not need to build a positioning infrastructure or its maintenance. It makes indoor location data available immediately, enabling optimization of movements of people and of things in offices and warehouses so that customers can improve operation efficiency, analyze behavior data, instructing delivery robots which route to run, et cetera, et cetera. We can already provide this service on 15,000 floors in 1,300 facilities across Japan. Kawasaki aims to become the de facto standard for indoor location solutions to make safe and secure societies with convenience.
Page 40. ESG topics. I would like to introduce our activities at factories to achieve carbon neutrality. Japanese government have declared its commitment to carbon neutrality by 2050. Our goal is to become carbon neutral in 2030 by installing hydrogen power generation at factories and group companies in Japan. Our timeline is 20 years ahead of the government because we have strong belief as a promoter of liquefied hydrogen supply chain.
We will keep you updated on the progress of this initiative on a regular basis. Page 41, please. This page shows major ESG topics for FY 2021 for your information. From page 42, there's more information such as CapEx, depreciation and amortization, R&D expenses, and the number of employees at the year-end. With this, I would like to finish my presentation. Thank you very much for listening.