I am Yamamoto. Thank you for joining us today. I would like to present the financial results for the Q3 FY 2020. Please turn to Page 3 of the presentation material. This slide shows a summary of the Q3 financial results.
Orders received and net sales are as shown here. As for orders, environments in precision machinery and robots and motorcycle and engines steadily recovered, but the impact by COVID-nineteen in aerospace systems and impacting energy system and plant engineering by prolonged negotiations and delayed investment decisions were observed. In rolling stock, reactive downturn from the large orders in previous year affected orders due to all of these orders declined year on year. Net sales declined sharply as a whole by JPY 102,900,000,000 year on year. Mainly, it was caused by the sales decline in Aerospace Systems, but the sales contractions rate has been moderating compared to the 2nd quarter.
Operating income will be elaborated in detail on Page 5 and onward by factor. Mainly due to the spread of COVID-nineteen, operating income decreased by JPY 34,700,000,000, but COVID-nineteen loss has been shrinking except in Aerospace Systems. Recovery in precision machinery and robot and motorcycle and engine was notable. And operating income 3 months from October to December turned to +18,100,000,000 yen showing steady recovery. Accordingly, recurring profit and loss improved to breakeven, but in net profit due to impairment loss of Sakaido works in the 2nd quarter and the partial withdrawal of deferred tax assets, loss of JPY 13,900,000,000 was posted.
At the bottom of the page, weighted average exchange rates and net sales in foreign currencies are shown. As shown here, yen appreciated against U. S. Dollar by JPY 4 to 1 dollar and depreciated against euro by JPY 1 to euro year on year. Page 4.
Orders received net sales and operating income by segment are as shown here. I'll explain them on the page of each segment. Page 5, details of change in profit and loss. Operating income decreased from JPY 30,900,000,000 to minus JPY 3,700,000,000 down JPY 34,700,000,000 year on year. Let me go through variance analysis.
COVID-nineteen impact was minus JPY38.8 billion for the whole company. Breakdown is Aerospace Systems account for 60%, motorcycle and engine and rolling stock were 10% plus respectively and 30% combined. And these three segments account for 90% of the total impacts. As for foreign exchange rates, as mentioned, yen appreciated against U. S.
Dollar in weighted average rate and the impact was minus 3,900,000,000 yen Thirdly, as for change in sales, despite profit increase due to sales growth in hydraulic equipment for excavator for China and semiconductor robot in precision machinery and robot impact by commercial aircraft related sales decrease in aerospace systems was substantial and minus JPY7.6 billion impact was recorded. Firstly, as for change in product mix and other factors, impacts by worsened after sales profit of engine as well as loss on shorter operation in Aerospace Systems were substantial. But profitability in rolling stock improved year on year and the product mix improved with robust sales of off road vehicle and motorcycle for North America in motorcycle and engine. And in total, positive impact of 1,900,000,000 yen was recorded. As for SG and A expenses, mainly hydrogen related R and D cost was reduced and promotion and advertisement cost in motorcycle and engine was reduced as well.
And in total, JPY 13,700,000,000 of improvement was posted. Factors for decreased operating income were explained before. But as for non operating income and expenses, it was JPY 3,600,000,000 up JPY 19,200,000,000 year on year. There are 2 major factors for change. Firstly, as for gain and loss on foreign exchange, yen appreciated against the U.
S. Dollar this year, but gain on payment side yen's depreciation against euro and variation gain on other currencies credit were posted. And the total gain and loss on foreign exchange was 1,900,000,000 yen up 6,700,000,000 yen year on year. Secondly, payments for the in service issues of commercial aircraft engines. After reviewing the payment of engine manufacturers, including Kawasaki Heavy Industries, considering the progress of replacement work, reversal gain on the payment posted previous year and before was recorded.
And with no new additional payment this year, in total, improvement of JPY 10,600,000,000 was posted. As for extraordinary income and losses, as explained in the Q2 results meeting, gain on sales of corporate housings and sales of shares of subsidiaries and affiliates were posted, while impairment loss on ship in Sakai works were also posted. Against some loss on business withdrawal recognized in the previous year, there was reactive uptick. And accordingly, extraordinary income was up 1,900,000,000 yen year on year to plus 800,000,000 yen Page 7, Aerospace Systems. FY 2020 Q3 orders, tariffs and profit year on year are as shown here.
This segment was most affected by the COVID-nineteen. As for the aircraft, sales units Boeing 787 and 777 decreased sharply due to shipment suspension caused by the planned operational suspension of Boeing and reduced production. And Ministry of Defense sales will be more concentrated to the Q4 compared to the previous year. Consequently, both sales and profit decreased substantially. As for engines, sales were down almost 50% year on year and after sales also decreased and sales fell sharply.
However, in 3 months from October to December, flight hours recovered And in the total of this segment, it turned to profit of plus 4,600,000,000 yen and 3 quarters cumulative operating income was minus 19,200,000,000 yen Full year forecast for FY 2020. Due to the additional cutback of Boeing production, profit of aircraft will be lower than the previously announced forecast. But after sales of engine has been improving, and the full year forecast remains unchanged from the previous one. In FY 2021, partly due to expected improvement of after sales of engine, segment profit is expected to recover gradually. Page 8, Energy System and Plant Engineering.
FY 2023 third quarter orders, sales and profit year on year as shown here. Domestic sales increase more than offset the impact of the COVID-nineteen, but in the previous year, large sales with construction work completion at the chemical plant for talcuminestan were posted and due to the backlash, total sales went down slightly year on year. As for profit, due to sales decrease and operation loss by the impact of COVID-nineteen, profit was down by JPY 4,600,000,000 from the previous year when we had profitable projects. Full year forecast for FY 2020. As for orders, due to expected delay of investment decision of clients and reduced project affected by COVID-nineteen Following the Q2, we revised down the forecast in this quarter.
Sales will be flat year on year, but forecast of the profit was revised up this time due to improvement of profitability for some projects. Precision Machinery and Robot. FY 2020 Q3 order sales and profit year on year are as shown here. FY 2020 forecast in China market, sales of hydraulic components for construction machinery are stronger than expected and sales were turning to recover from the Q3 in other markets. Therefore, we revised up the forecast of orders, sales and profit.
Page 10, ship and offshore structure. FY 2020 Q3 orders and sales year on year as shown here. FY 2020 forecast, orders and sales forecast remain unchanged, But profit was revised down to minus 3,500,000,000 along with the change of foreign exchange assumption. For the management stability in the next year and onward, we will strive further to win orders of commercial ships, in particular, LPG carriers. Page 11, rolling stock.
FY 2020 3rd quarter orders and sales year on year are as shown here. As for profit, in the 3rd quarter, we posted additional allowances for project food processors reviewed in North America due to COVID-nineteen. But profit increased with sales increased rolling stock in Japan and profit rebounded after the loss making project in North America in the previous year. And as a whole, profit improved by 1,800,000,000 yen. FY 2020 forecast.
As mentioned, reviewing the process in North American project, we revised down the forecast of sales and profit this time. This time, we will examine the cost deterioration of the entire project in North America, including that of the next year caused by the reduced operation due to COVID-nineteen, and the result will be reflected in this fiscal year. And in FY 'twenty, 'twenty one and onward, business will be firm, including that of North America. Page 12, Motorcycle and Engine. FY 2020 Q3 sales year on year, as shown here.
Up to the first half, COVID-nineteen impact has been substantial. But for North America, sales are higher than the previous year, mainly in off road model. And in Europe, sales are recovering to the previous year's level, and they more than offset the decline in margin countries. As for profit, in 3 months from October to December, operating income was plus 6,900,000,000 yen and COVID-nineteen negative impact is clearly over except the emerging countries. FY 2020 forecast, especially due to the strong retail sales in North America, this time we revised up the forecast of both of sales and profit.
Strong retail sales in North America are expected to continue, but in the 4th quarter, sales promotion costs will increase with the expansion of sales promotional activities. And fixed costs, including R and D expenses, will be concentrated in the 4th quarter. Therefore, even with the quarter on quarter sales growth, profit will be down. Page 13, summary of balance sheet. Compared to the end of the previous fiscal year, total assets are up by JPY 83,800,000,000 because of robust sales in motorcycle business, collection of account receivable progress.
But on the other hand, by securing cash on hand, cash and deposit increased and inventories increased in Aerospace Systems, and they resulted in asset growth. On liabilities, along with the total assets growth, interest bearing debt increased and total liabilities increased by 98,700,000,000 yen As a result, net DE ratio slightly worsened to 141.6 percent quarter on quarter. We'll continue to work hard to improve to achieve the level which has been shown as a guideline. Page 14, summary of cash flow. Operating cash flow improved JPY148,600,000,000 year on year due to backlash in the previous year from the credit securitization in 2 years ago in Aerospace Systems segment.
Progress in account receivable collection backed by the strong retail sales in Motorcycle and Engine segment in this year and decreased inventories. Investing cash flow improved 23,800,000,000 due to gain on sales of corporate housings and sales of shares of subsidiaries. As a result, free cash flow improved by 172,400,000,000 yen year on year. In the Q4 and onward, we will continue to improve financial position through initiatives to improve profitability, capital efficiency and cash flow, so that free cash flow positive will be achieved quickly. Page 15, consolidated forecast for this year.
As for orders, orders in energy system and plant engineering were revised down affected by COVID-nineteen, but recovery in motor cycle and engine and precision machinery and robot are stronger than expected and growth in defense demand and after sales of engine in aerospace system are expected. Therefore, total orders forecast was revised up JPY 20,000,000,000 from the previously announced one. As for sales and profit, loss in overseas project in rolling stock is reflected. But as increased sales and profit in motor cycle and engine and precision machinery and robot are expected as well as profitability improvement in energy system and plant engineering. Operating income is revised up by JPY 10,000,000,000 from the previous forecast to minus JPY 10,000,000,000.
And recurring profit is also revised up by JPY 10,000,000,000 to minus JPY 15,000,000,000. As for net income attributable to owners of parent, considering the possible additional expenses, as of today, it was revised up JPY 2,000,000,000 from the previous forecast to minus JPY 25,000,000,000. As presented in the group Vision 2030 shown on November 2, we continue to make active investment in new businesses, including airport PCR testing services, medical robot and near future mobility, which are expected as new growth domains and aim to achieve profitability steadily in the next fiscal year. Page 16 shows actual results in FY 2019 and a focus for FY 2020 by segment in the table for reference. Page 17 shows before tax ROIC by segment in the table for reference.
Page 18 19, R and D CapEx, number of employees and historical data are shown. Page 20 and onward shows market overview of each segment for reference. Page 22, the final page shows as explained in the November 2 about the group Vision 2,030, the progress of the growth areas that we focus on today. Mainly, there are 3 points. First one is the current status of the robot based PCR testing services.
We have received many inquiries, and it was officially decided that the first test will be conducted in Fujita Health University in Aichi. Today from 13 media presentation was organized. For details, please refer to the press release on our website. Testing systems are already installed in Fujita Harusui University and in front of mid February, collaborating with the university testing service will be launched. Another project is in preparation for Nippon Foundation.
For the project, it was announced that targeting nursing care facility staff in Tokyo, 14,000 PCR tests a day will be launched from April. 2nd one is about robotic assisted surgery system, Hinotori. Product presentation was on November 18, and the product rollout was from December. Clinical use already started in Kobe University. In December, 1st clinical surgical operation was successfully carried out.
By the end of January, the 5th clinical surgery was operated, and the progress has been solid. Third one is hydrogen related project. Our verification test of liquefied hydrogen carrier is ongoing and the liquefied hydrogen receiving terminal completed, also the first ones in the world. And the basic design for the world's largest liquefied hydrogen storage tank is completed. This concludes the presentation on the financial results for the Q3 FY 2020.
Thank you for your attention.