Thank you for your participation today. My name is Hashimoto, President. Please allow me to offer my sincere apologies once again for the concern caused to our stakeholders as a result of the misconduct incidents uncovered in the previous fiscal year during the process of addressing past underlying issues. In December last year, we received the final report of the Special Investigative Committee. The impact of these incidents on our results was reflected in the results for fiscal year 2025. We believe that some of the financial impact of these incidents on results from the current fiscal year onwards have been limited. Our company will remain fully focused on regaining the trust of our stakeholders.
Regarding our full year results for fiscal year 2025, revenue was JPY 2.3112 trillion, business profit was JPY 145.1 billion, and profit attributable to owners of parent was JPY 108.1 billion. In all cases, we recorded record results for a second consecutive fiscal year. Turning to the full year forecast for fiscal year 2026, we have set the exchange rate at JPY 150 to the dollar. For business profit, which attracts significant attention, we anticipate recording JPY 170.0 billion. This would exceed our previous record for business profit by a large margin. We expect revenue to increase compared with fiscal year 2025, and we anticipate an increase of profit to JPY 110.0 billion.
Accordingly, we are making steady progress towards our fiscal year 2030 target of a business profit margin exceeding 10% in all business segments. Regarding the external environment, we expect difficulties with procuring materials and production delays as a result of the Middle East situation, and we have incorporated a certain amount of risk in the forecast. Turning to US tariff policy, our assumptions are based on the systems and tariff rates that have already been applied or are expected to be applied at this stage. We have not incorporated impacts from any refunds of reciprocal tariffs paid in the previous fiscal year. Looking ahead, in the next and later announcements of our financial highlights, we will reflect the latest situation in our results forecasts as necessary. Let's now move on to a more detailed explanation. Allow me to hand you over to Mr. Yamamoto.
My name is Yamamoto, Chief Financial Officer. Thank you for your participation. Allow me to present the financial highlights. This is page five. In our financial highlights for fiscal year 2025, as you can see, revenue and profit both increased year-on-year, and our company recorded record highs for orders received, revenue, and profit. Pre-tax income was JPY 145.5 billion, an increase of JPY 23.5 billion compared with the February forecast, and net income was JPY 108.1 billion, an increase of JPY 18.1 billion on the forecast. The weighted average exchange rate was approximately JPY 1.7 stronger than in the previous fiscal year, and US dollar-based transactions amounted to approximately $2.2 billion. Please see page six. This chart provides a breakdown of orders received, revenue, and business profit for each segment.
As point one shows, in the Energy Solution & Marine Engineering segment, the energy business and the ship and offshore structure business continued to perform strongly, and revenue and profit both increased. In contrast, as point two shows, in the Powersports & Engine segment, despite an increase in revenue, profit decreased due to factors such as increased tariff costs and decreased profitability against a backdrop of intensifying competition in the US Powersports market. Page seven shows the statement of profit and loss. Please see the chart for details. As point one shows, selling, general and administrative expenses increased due to revenue growth, but the selling, general and administrative expenses ratio decreased as a result of our efforts to control fixed costs. Please see page eight.
As point two shows, foreign exchange gains of JPY 18.9 billion were recorded due to translation gains arose on foreign currency denominated receivables resulting from depreciation in the value of the yen at the end of the fiscal year. Consequently, profit attributable to owners of parent increased by JPY 20.1 billion, year-on-year to JPY 108.1 billion. This is page nine. Next, I will explain the factors affecting changes in business profit. Regarding change in revenue, the Powersports & Engine segment contributed significantly to revenue due to increased sales. In contrast, looking at change in product mix and other factors, despite a noteworthy improvement in profitability in the Energy Solution & Marine Engineering segment, profitability dropped sharply in the Powersports & Engine segment.
As a result, business profit increased by JPY 1.9 billion year on year to JPY 145.1 billion. Business profit decreased by JPY 18.7 billion due to cost increase due to US tariff policies, mainly in the Powersports & Engine segment. Please refer to page 10 for a detailed breakdown by segment. Page 11 shows the statement of financial position. Please refer to the provided materials for details on the factors contributing to changes in assets at the end of FY 2025. Please see page 12. Looking at factors contributing to changes in liabilities and net assets, a significant improvement was recorded in the net debt-to-equity ratio, which was 54.5% compared with the targeted 70% range.
This was due to securitization of receivables as well as allocation of a portion of the JPY 80.0 billion consideration from the transfer of 20% of the shares of Kawasaki Motors, Ltd. to ITOCHU Corporation as shown in point six. Page 13 shows the statement of cash flows. Despite increases in trade receivables and inventories in the Powersports & Engine and Aerospace Systems segments, obtaining profits had a strong impact and positive free cash flows of JPY 12.0 billion were recorded. This was the second consecutive fiscal year of positive free cash flows. Please see page 14. For reference, we have provided a chart showing the cash flow trends over the past 10 years. This is page 16. This shows the forecasts for fiscal year 2026.
The exchange rate assumption is JPY 150 to the dollar, and we anticipate business profit of JPY 170 billion, significantly exceeding last year's record high profit and an increase of profit to JPY 110 billion. Our view is that steady progress is being made towards our fiscal year 2027 target of a business profit ratio of 8%, as well as our fiscal year 2030 target of a business profit ratio exceeding 10% in all business segments. Regarding external environment risks, as the materials show, we have incorporated an impact of approximately JPY 8.0 billion in business profits from the Middle East situation on the assumption that the distribution of crude oil and others will have restarted and economic activities will have stabilized by the end of June.
As for the impact of US tariff policy, we have incorporated estimates based on the current regulatory framework, but we have not incorporated refunds related to IEEPA tariffs. Page 17 shows factors affecting changes in business profit of fiscal year 2026. Decreased profitability resulting from cost increases related to US tariff policy were mostly covered by increased revenue effects and price optimization. Accordingly, we anticipate achieving a large year-on-year increase in profits. Please see page 18. We anticipate increased profits in the Aerospace Systems, Energy Solution & Marine Engineering, Precision Machinery & Robot, and Powersports & Engine segments, mostly as a result of increased revenue. Meanwhile, we have recorded a decrease in profit under elimination in Corporate as a result of active investments in new business. Please see page 53 for details. Page 21 is about Aerospace Systems. The slide shows the results for fiscal year 2025.
Revenue slightly underperformed the figures announced in February, but business profit finished at JPY 62.4 billion, up JPY 2.4 billion, as a result of improved profitability in the aero engine business. Turning to the forecast for fiscal year 2026, we anticipate a temporary decrease in orders received because fiscal year 2026 will fall between large orders received in Ministry of Defense business. However, revenue is expected to increase due to higher revenue in aero engine business, specifically in Ministry of Defense business, Boeing business, and commercial aircraft business. Accordingly, we anticipate a major increase in profit as a result of this increased revenue. This is page 22. For your reference, page 22 provides results for orders received and revenue in the Aerospace Systems and aero engine businesses, including the number of aircraft component parts sold to Boeing and the number of aircraft engine component parts sold.
This is page 23. This page shows the quarterly trends in revenue and business profit. Also provided for your reference, it gives an overview of past trends. This is page 24. This page outlines the current state of the business environment and order trends in the segment. It also presents the specific efforts we are taking to achieve the forecast. Page 25 is about Rolling Stock. The slide shows the results for fiscal year 2025. Regarding the forecast for fiscal year 2026, we anticipate a decrease in orders received in reaction to the large orders received in the previous fiscal year and the project for the New York City Transit Authority. However, revenue is expected to be almost flat, and we anticipate profit of JPY 10.0 billion, up JPY 1.4 billion, partly reflecting one-off losses in the previous fiscal year. This is page 26.
This page shows orders received and revenue in Japan, Asia, and North America. For your reference, it also shows revenue and after-sales service, which we have focused on as a profitable business undertaking and the progress of the R211 project for the New York City Subway in the U.S. For your reference, page 27 shows quarterly trends in revenue and business profit. This is page 28. Details of the situation in the Middle East are shown for your reference, including the impact of the difficulty in procuring solvents on production processes, as well as countermeasures. As of the start of May, we have been able to secure materials. Page 29 is about Energy Solution & Marine Engineering. The slide shows the results for fiscal year 2025.
Regarding business profit, in the fourth quarter, we recorded an amount to account for the impact of the misconduct incidents related to submarines. For this reason, the target announced in February was not reached. Turning to the fiscal year 2026 forecast, we anticipate an increase in orders received due to increased orders in the plant business, ship and offshore structure business, and Ministry of Defense business. Revenue is expected to increase due to higher revenue in the marine machinery business and the ship and offshore structure business. We anticipate JPY 69.0 billion in business profit, an increase in profit of JPY 14.0 billion year-on-year due to increased profit from higher revenue, as well as a reaction to the one-off losses in the previous fiscal year described above. This is page 30.
This page provides a breakdown of orders received and revenue for the energy, plant and marine machinery business, and the ship and offshore structure business. This is page 31. An explanation of this page will be omitted. This is page 32. Looking at specific efforts, the key role in this segment is played by products and services that contribute to realizing a low carbon or decarbonized society. This page shows an order received for a waste treatment facility. Looking at measures for providing decarbonization solutions, please refer to our introduction of the launch of demonstration operation in the Harima plant of a centrifugal hydrogen compressor for hydrogen liquefaction plants. Page 33 is about the Precision Machinery & Robot segment. This slide shows the results for fiscal year 2025, which were almost in line with the forecast announced in February for both revenue and profit.
Regarding the forecast for fiscal year 2026, we anticipate increases in both orders received and revenue as a result of increases in hydraulic machinery business supplying the construction machinery market in China and business and robots used for semiconductor manufacturing equipment. Profit is also expected to increase as a result of increased revenue. This is page 34. This page shows orders received and revenue for both the Precision Machinery business and the Robot business. Revenue from hydraulic components and systems to the Chinese market and a breakdown of robot-related revenue by segment are also provided for your reference. This is page 35. An explanation of this page will be omitted. This is page 36. Please refer to this page regarding the business environment. As I explained earlier, business in both hydraulic components and systems and robots is expected to recover steadily. Page 37 is about Powersports & Engine.
Regarding results in fiscal year 2025, revenue and profit both increased compared with the figures announced in February. Regarding the forecast for fiscal year 2026, we anticipate increases in both revenue and profit. Reasons include strong sales figures and a growing market share for motorcycles in both North America and Europe. This is despite the effects of the Middle East situation and an additional burden of JPY 17.3 billion compared with the previous fiscal year as a result of US tariffs. This is page 38. Page 38 shows revenue from motorcycles for developed countries, motorcycles for emerging markets, four wheelers and PWC, and general-purpose gasoline engines. For reference, we have also included regional sales volumes for motorcycles and sales figures for four wheelers and PWCs. This is page 39. An explanation of this page will be omitted. This is page 40.
It explains matters such as the business environment and trends in orders received. For reference, we have provided new information about the impact of the situation in the Middle East. This is page 42. Regarding shareholder returns, as announced in February, from the current fiscal year, we will implement dividends based on the DOE standard of 4%. Reflecting the increase in profit, our year-end dividend for fiscal year 2025 was JPY 19.2 per share, an increase of JPY 1 per share compared with the figure announced in February. This brings the annual dividend per share to JPY 34.2. In fiscal year 2026, we anticipate an increase in the annual dividend to JPY 40 per share. This is page 43. Here, we would like to report on two project topics.
Firstly, from the perspectives of energy security and the acceleration of carbon neutrality, we will introduce hydrogen technology and our gas-to-gasoline GTG technology. Amid growing energy security risks globally stemming from the worsening situation in the Middle East, expectations are likely to increase further for hydrogen as an alternative energy to fossil fuels and as a fundamental resource that can be converted into a wide range of products. For instance, the GTG plant, which was completed by Kawasaki Heavy Industries in Turkmenistan in 2019, uses natural gas to manufacture high-quality gasoline and through the process synthesizes hydrogen and CO2. By using plant-derived CO2 or CO2 captured through technology such as DAC for synthesis with hydrogen, this technology makes it possible to produce carbon neutral gasoline.
Currently in Japan, shortages of petrochemical materials such as naphtha are becoming a concern. Application of our GTG technology will enable the production of these materials. We believe this will present many business opportunities for Kawasaki Heavy Industries. This is page 44. This page introduces a collaboration on next generation construction machinery solutions that our company is pursuing with Bosch Rexroth Corporation, a globally leading hydraulic machinery company. By blending our company's strength in cross-functional technologies and high-quality hydraulic machinery with Bosch Rexroth's specialist knowledge of systems and advanced digital resources, we aim to establish next generation standard technology and reinforce our competitiveness. Please see page 45. Given that this presentation concerns our year-end results, we would like to take a look at two ESG related topics. Firstly, we explain the response to the cases of misconduct that were uncovered in 2024.
We received the final report of the Special Investigative Committee in December 2025 and released it on the same day. In response, as the slide shows, since the cases were uncovered, we have executed appropriate and ongoing recurrence prevention measures. More recently, in April this year, we newly established the Quality Assurance General Department as an organization for guaranteeing quality across the whole company. By establishing the quality control department under the quality assurance group, we have built a system for giving central monitoring and guidance on the quality control functions of each division. Furthermore, we have newly established the Organizational Culture Reform and Compliance Group, which is directly overseen by the Human Resources Division to promote an integrated approach to human resources development and legal compliance measures.
In this way, we will accelerate the transformation of our corporate culture based on a platform of trust and dialogue, and steadily promote business transformation to give the highest priority to compliance. Please see page 46. Since fiscal year 2020, our company has conducted an annual WinDEX engagement survey of our employees. For our KPI, we are using the active group rate designated by WinDEX, a third-party organization. This approach has allowed us to make efforts to increase employee engagement. In fiscal year 2025, our efforts to reform our organizational culture paid off, and we achieved a significant improvement in our active group rate to 36%, up five points year-on-year. This is above the average for Japanese companies. We will continue to strengthen these activities with the goal of reaching the global standard of 50% by fiscal year 2030.
Moreover, our company has been selected once again as a component of the Dow Jones Best-in-Class Indices, a global stock index. This is the second consecutive year we have been selected after our inclusion in the previous fiscal year. We see this as evidence of the high regard given to our company's ongoing implementation of ESG initiatives. Supplementary information is provided from page 47 onward. A breakdown of the elimination in corporate has been newly provided on page 53. Please refer to this as well. This concludes the presentation. Thank you for your attention.
I will now explain the outlook for achieving a business profit margin of 10%, as described in our Group Vision 2030. As explained earlier, in our consolidated results for fiscal year 2025, we achieved new records for revenue and business profit. Looked at by business, large contributions to our profits were made by order-based businesses, including not only the Aerospace Systems business but also the Energy Solution and Marine Engineering business. A large contribution was also made in the ship and offshore structure business as a result of strong performance in shipbuilding business at the joint ventures in China, as well as ongoing construction of LPG and ammonia carriers in Japan.
Concerning Rolling Stock, business has stabilized, particularly in our North American business as a result of mass production of the R211 project for the New York City Transit Authority and an additional order received for the same type in the R268 project. In mass production-based businesses, the Precision Machinery & Robot segment contributed to profitability through progress with cost passthrough and cost reductions, as well as increased sales of robots used for semiconductor manufacturing equipment, which is one of our strengths in this segment. In the Powersports & Engine segment, despite an impact from tariffs in the fourth quarter, sales and profit exceeded expectations for reasons such as strong sales of high-priced four-wheelers. In light of these circumstances, we expect, as the outlook for our company's results in fiscal year 2026 presented today, to significantly surpass fiscal year 2025 in both revenue and business profit.
Looking ahead, we expect impacts from changes in the external environment, including the Middle East situation, exchange rates, and US tariffs. However, we also sense further opportunities for our company to demonstrate the true value of the technologies and businesses we have cultivated, including expanded defense budgets, the emergence of physical AI, and the 17 strategic fields clarified by the Japanese government. The profit levels for fiscal year 2025 and 2026 may appear to show a certain gap from your perspective. However, as you know, in the Aerospace Systems business, both commercial and defense businesses are expected to grow from fiscal year 2027 onward. In addition, we are currently implementing business reforms in the Precision Machinery & Robot, which are expected to improve profitability, and significant results from these initiatives are expected to emerge from fiscal year 2027.
Furthermore, in the four wheeler business of Kawasaki Motors, Ltd., production and sales are also expected to stabilize further from fiscal year 2027, making the 8% target for fiscal year 2027 an increasingly realistic figure. Our entire group will come together to promote our business with the aim of achieving our fiscal year 2030 target of a business profit margin exceeding 10% in all business segments. We hope you will provide us with even greater guidance and encouragement in the future. Thank you for listening.