I am Yamamoto. Thank you for joining our meeting today. As announced in our website at 11:30, we had strong results of the Q1 FY 2021. Although some risks including logistics disruption and the surging price of materials are remaining, assuming that the robust performance of motorcycle among others would continue, this time we revised up the full year forecast at the time of the Q1. I'd like to present the contents.
Page 2 shows the table of contents. I will explain the following this order. Page 3 shows consolidated results summary. In the Q1, net sales were JPY 355,600,000,000 Operating profit was JPY 15,100,000,000 and recurring profit was JPY 13,100,000,000 Net income was JPY 9,800,000,000 almost equivalent to the 1 in FY2013, one of the best net income in the last decade. As for weighted average exchange rate, as shown here, yen depreciated by 4.4 yen to 1 dollar year on year.
And the U. S. Dollar based transaction was $400,000,000 Page 4 shows consolidated results by segment. Orders received net sales and operating profit by segment are as shown here. Aerospace Systems loss continued despite significant recovery in the traveler demand.
On the other hand, in motorcycle and engine, sales and profit increased significantly due to strong demand for outdoor leisure, mainly in developed countries, while sales decreased in the corresponding quarter in the previous year due to COVID-nineteen. Improvement in these two segments were notable. And in total, sales increased 55,000,000,000 yen and operating profit increased 35,800,000,000 yen year on year. Page 5 shows income statement from net sales to recurring profit. Specifics are as shown here.
Along with a significant sales growth in motorcycle and engine, sales cost also increased as shown in number 1. As for non operating income and expenses, loss on foreign exchange was posted due to year end translation of foreign bond and as the yen appreciated slightly since the end of the last fiscal year. As for the equity income of unconsolidated subsidiaries and affiliates, loss of 1,000,000,000 yen was posted due to profit deterioration in ship JV in China by appreciation of yuan and rising steel prices. Page 6. Next, let me explain the profit item below recurring income.
In this quarter, as shown in number 4, extraordinary income was posted due to sales of land in Yokaichi. As for tax, due to the absence of reversal of expenses on deferred tax assets in the previous year, this year expenses of 4,300,000,000 yen were posted. As a result, net income was plus 9,800,000,000 yen Page 7 shows the details of change in profit. Operating profit increased 35,800,000,000 yen year on year, and motorcycle and engine accounted for 60% of the growth. By variance, motorcycle accounted for 80% of the change in sales, showing the strong momentum of the business, which drives the profit growth.
In Aerospace Systems, jet engine maintenance cost, which was a heavy burden in the corresponding period of the previous year, decreased, and that contributed greatly to change in product mix and other factors. Details by segment are shown on Page 8 for your reference. Page 9 shows balance sheet up to the total assets. As for the changes in total assets, as shown by number 12, due to changes in accounting standard for revenue recognition, some adjustment was recorded between accounting items. For the reduction in trade receivables, besides the accounting procedural change, as mentioned, progress of receivable collection in plant engineering and motorcycle also contributed.
Page 10 shows balance sheet of liabilities and net assets. As for variance for liabilities and net asset, as shown in 1, trade payables in Aerospace and Motorcycle decreased. As a result, as shown in 2, interest bearing debt increased, but we assume it as normal for the Q1. With this, net DE ratio turned to 119%, and it is the improvement of about 7 point year on year. That said, to fill the gap with a targeted 70% to 80%, further effort is required in the collection of receivables, reduction in inventories and improvement in capital efficiency.
Number 3 shows impact by the application of the accounting standard for revenue recognition, but please note that this has no impact on cash flow. Page 11 shows cash flow statement. Operating cash flow improved substantially compared to the previous year, which was affected by the COVID-nineteen. This year, in addition to the posting of profit, working capital improved substantially year on year, as shown in 1, as our retail strong sales continued in North America in Motorcycle segment and the collection of receivables and inventory adjustment proceeded. Investing cash flow worsened compared to the previous year when gain on fixed asset sales were posted.
But excluding these special factors, it was almost flat year on year. As a result, free cash flow improved by yen on year to the deficit of yen 55,200,000,000 In the rest of the fiscal year, we will improve capital efficiency further to ensure the positive free cash flow. Page 12. For your reference, cash flow development in the last 10 year is presented. Page 13 shows earnings forecast for FY 2021.
Given the progress in motorcycle and engine and exchange rates, orders received and net sales were revised up by 30,000,000,000 yen respectively, and operating profit was revised up by 10,000,000,000 yen As a result, orders forecast for FY 2021 is 1,510,000,000,000 yen Net sales are 1,530,000,000,000 yen and operating profit is 40,000,000,000 yen through the upward revision. As no operating profit and tax expenses will be higher than the initial forecast, Recurring profit is revised at JPY 8,000,000,000 to JPY 28,000,000,000 and net income is revised up JPY 2,000,000,000 to JPY 19,000,000,000 For this forecast, exchange rate is assumed as JPY 109 to 1 dollars with yen's appreciation of yen from the previous forecast. Let me explain in detail by segment. Page 14 shows forecast by segment. Segment breakdowns are shown in the table.
Motorcycle and engine profit growth is yen 8,000,000,000 yen which accounts for 80% of the total growth. Other details will be provided by segment. Page 15 shows Aerospace Systems. The results of the Q1 FY 2021 are shown on the slide. Post of orders and net sales decreased year on year due to the new accounting standard for revenue recognition, but profit improved substantially due to increased sales for Boeing and an improvement in profitability of components parts for commercial aircraft jet engines.
As for the full year forecast, orders and sales decreased year on year also due to the new accounting standard for revenue recognition. But we assume that the market environment almost remain unchanged from the previous announcement. And this time, only improvement by the FX rate assumption was incorporated. As for Boeing 787, as presented in the company's results announcement on July 28, In this year, temporary, monthly production will be below 5, but gradually, it will be recovering to the level of 5 per month. Therefore, the impact on the present forecast will be limited.
Page 16. This page shows orders and sales of aerospace and the aero engine, number of aircraft component parts sold to Boeing and the number of jet engine component parts sold for your reference. Page 17 shows the quarterly sales and operating profit development for your reference. Page 18 shows market overview of the company and the specific efforts to achieve the guidance. It has no major change from the previous announcement, and we regard the key issue is to improve earnings in Air engine business among others.
And we will strive to reduce production cost and ensure to review the fixed cost structure to be in line with the business market changes. Page 19 shows rolling stock. The results of the Q1 FY 2021 are as shown on the slide. Though sales decreased slightly year on year, profit improved due to improved profitability of overseas projects that recovered from the impact of COVID-nineteen. The full year forecast is also kept unchanged.
Page 20 shows orders and sales in domestic and Asia and North America. And appendix shows profitable sales in components, overhaul and after sales service and the progress of M9 project for Long Island Railroad in the U. S. For your reference. Page 21 shows quarterly sales and operating profit development for your reference.
Page 22 shows market overview of rolling stock. As well as Aerospace, there also is no major change from the previous announcement. As for the North America M9 project, which incurred losses in recent years, the delivery of 92 trains on base contract was completed. The production of the final train on the option contract has been launched, and the delivery is scheduled to be completed in the Q1 in the next fiscal year. And we received an order and started the remote truck monitoring service for the United States, which we have been long working on in the Q1 FY 2021.
As such, by expanding relatively profitable businesses such as components after sales service and maintenance service, we will improve profitability of the entire business. Page 23 shows Energy Solution and Marine Engineering. The results of the Q1 FY 2021 are as shown on the slide. Profit decreased with less profitable project compared to the previous year. As for the full year forecast, like in the Q1, less profitable project and the gradual expansion of operating loss with commercial ship business are expected.
As of the previous announcement, we had expected a substantial profit decline year on year. But this time, as we incorporated increased steel material price in ship business, full year operating profit was revised down by 1,000,000,000 yen to 2,500,000,000 yen. Page 24. Breakdown of orders and sales of Energy System and Plant Engineering and ship and offshore structure are provided for your reference. Page 25 shows quarterly sales and operating profit development for your reference.
Page 26 shows market overview of the segment. In this year, we received the order for SPICE, unmanned autonomous underwater vehicle equipped with inspection robot arm for subsea pipelines, first of this kind in the world. Increased inspection, operational efficiency and reduced working load are expected. And we'd like to expand the Series 4 inspections of aging subsea pipelines in North Sea and other regions. And in order to establish the leading position in the decarbonization field, Kawasaki Green Energy Limited, a subsidiary, started operation on April 1.
Through this company, we will work to expand CO2 free energy. Page 27 shows Precision Machinery and Robot. The quarterly results of the Q1 FY 2021 as shown on this slide. Sales and profit increased due to robust robots business in hydraulic equipment for construction machinery industry and for semiconductors. As for the full year forecast, profit is revised up by 1,000,000,000 yen from the previous announcement due to an improvement in profitability of robots.
Page 28. This slide shows orders and sales of hydraulic components and the robot sales of hydraulic components in China and the sales of robots by segment for your reference. Page 29. This slide shows quarterly sales and profit development for your reference. Page 30.
As for market overviews, it was reported that some construction equipment manufacturers have started inventory adjustment in Chinese construction equipment market, and we have been closely monitoring the situation. But business in ex China has been strong, and we assume that overall condition will stay unchanged. In robots, demand for semiconductor has been strong. As for specific measures, they remain unchanged from the previous announcement. And we will continue to secure solid revenue through electrification and automation of construction equipment, leveraging our technology.
And we'll compete against the following companies, which are trying to catch up in hydraulic equipment and systems. In robots, we explore market and expand business through ARI phase market oriented approach by capturing market needs and collaboration with academia, government and the startup companies in addition to the industry peers. Page 31 shows motorcycle and engine. The quarterly results of the Q1 FY 2021, as shown on the slide. Not only the off road motorcycles and all wheelers for North America, demand in Southeast Asia was also strong year on year, and they led to the substantial growth both in sales and profit.
As for the full year forecast, we revised sales and profit substantially, reflecting robust demand in developing countries. Increasing logistics cost and raw material cost are incorporated to some extent, and we assume that they may change in the future. Page 32 shows orders and series of motorcycles in developed countries, emerging market, vehicles, PWC and general purpose engines. For your reference, motorcycle sales by country are shown in appendix. Page 33.
This page shows quarterly sales and operating development for your reference. Page 34, as for the market overview of motorcycle and engine, this time we added the comments on supply chain risks. As for specific efforts, even with those risks, firstly, we present the product supply to meet the market demand to the maximum. In the full year forecast, as mentioned before, profit decline risk by supply shortage due to semiconductor shortage and others are incorporated. But by taking various measures, we'd like to achieve the production in line with our guidance and aim to improve profit further.
Page 35 shows shareholder return. In the previous announcement, I said that the full year dividend of 30 yen was planned for this year, but interim dividend was undecided. This time, based on the Q1 results, let me announce that we decided the interim dividend as While the future business environment remains uncertain, we'll take measures through all out effort and strive to improve profit, and we aim to achieve the upside of the dividend on the currently planned 10 yen for the second half. Page 36 and onward show project topics. This time, I'll present 3 project topics.
First, let me introduce the issuance of our first sustainability bond. This focuses on hydrogen business, and it is a 1st sustainable bond in Japan with hydrogen business as a major application. It was sold out on the day of offering, and ultimately, we had several times of application for the offering receiving the high acclaim. In order to achieve the group vision 2,030 to achieve SDGs, we accelerate our initiatives on sustainability management and through fundraising via sustainable finance, we enhance the engagement with stakeholders further. Page 37.
This slide shows the progress of PCL viral testing service, which is increasingly highlighted. As a progress from the previous announcement, testing system was installed in Kansai International Airport, and we're aimed to launch the testing service in future for the departing passengers for international flight. We started sampling tests for employees at Akashi Works and Kobay Works, and we are aimed to launch the screening testing service in the neighboring areas as well. They are described on this slide for your reference. For these businesses, it is hard to predict the size of annual revenue at this moment.
And the forecast we presented today does not incorporate these factors. At the timing, they can be reflected in the forecast, we will let you know, and we'd like to have your understanding. Page 38 describes a joint venture with Sony Group Corporation, which was announced in May for your reference. Page 39 and onward as appendix, CapEx depreciation, R and D expenses and the number of employees at the end of the fiscal year are shown for your reference. This concludes my presentation.
Thank you very much for your attention.