This is Mr. Fukumoto, General Manager of Finance and Accounting of IHI Group. I will explain IHI Group's financial results for the first half of the fiscal year 2021 based on the PowerPoint presentation materials disclosed at 3 P.M. today. From the end of the fiscal year 2020, we have voluntarily adopted International Financial Reporting Standards, or IFRS. As with the first quarter, the figures for the previous year are also restated from JGAAP to IFRS for the purpose of year-on-year comparison. This page shows the contents of the presentation. Please turn to page 4. This slide shows an overview of the results for the first half of the fiscal year 2021. Overall, we were able to steadily achieve increases in every profit line, including the operating profit, although the impact from the spread of COVID-19 persisted in civil aero engines.
The performances of three non-aero businesses, namely Resources, Energy and Environment, Social Infrastructure and Offshore Facilities, as well as Industrial Systems and General-Purpose Machinery, remained steady following the first quarter trend, despite the impact being apparent in some businesses due to the adjustment of automobile production caused by the shortage of semiconductors and supply chain disruptions, in addition to soaring steel prices and marine transportation costs. On the other hand, in aerospace and defense, sales of engines and spare parts for civil aero engines increased gradually backed by the recovery trend of demand for aero transportation on domestic and short-haul international routes.
The cash flows in the first half turned positive for the first time in the four years since the first half of fiscal year 2017 as a result of activities aimed at improving the working capital, such as collection of receivables and reduction of inventory, in addition to the impact from the sale of assets held in the first quarter. I will explain details in the pages that follow. Please turn to page 5. This slide shows the consolidated results, including orders received and the income statement. Orders received increased by JPY 82.3 billion, or up 19.3%. Revenue was up by JPY 34.8 billion, an increase of 7.2%. Both orders and revenue increased substantially from the same period of the previous fiscal year when the group's results were affected by the spread of COVID-19.
As shown at the left bottom, the average exchange rate for revenue in the first half was 110.34 yen to the US dollar. There was 2.83 yen depreciation from the previous corresponding period. Operating profit was JPY 26.3 billion, up JPY 32.4 billion year-on-year due to higher revenue and the impact from the sale of assets, and also as a result of reinforcing the cost structure through stricter management of projects and lowering the break-even point, among others. Profit attributable to owners of parent was JPY 15.1 billion. Please turn to page 6 for orders received and order backlog by segment.
Orders received increased significantly year-on-year, mainly due to securing orders in carbon solutions, nuclear energy, and bridges, in addition to achieving recovery from the impact of COVID-19, despite effects from the shortage of semiconductors and supply chain disruptions being apparent in some of the three non-aero businesses. In aero engine space and defense, although total orders were down year-on-year, orders for engines and spare parts for civil aero engines increased. Overseas orders received was JPY 227.8 billion, representing 45% of total orders. Order backlog at the end of September was JPY 1,150 billion, which was almost at the same level with the end of the previous fiscal year. Please turn to page 7 for revenue and operating profit by segment.
Three non-aero businesses recorded operating profit on par or higher compared with the first half of fiscal year 2019 before the spread of COVID-19. In Resources, Energy, and Environment, revenue increased in nuclear energy and also due to recovery in the plant construction work overseas, which faced delay in progress amid the spread of COVID-19 in the previous corresponding period. Operating profit increased due to higher revenue in nuclear energy as well as effect from unprofitable projects in Carbon Solutions mostly hitting the bottom. In Social Infrastructure and Offshore Facilities , revenue increased in shield systems, among others. Operating profit decreased due to the soaring steel prices and marine transportation costs in bridges and water gates, in addition to the effect of gain on sales of investment property recorded in the previous corresponding period.
Revenue in Industrial Systems and General-Purpose Machinery increased in heat treatment and surface engineering, as well as vehicular turbochargers. However, sales growth of vehicular turbochargers is stagnant due to the adjustment of automobile production caused by the shortage of semiconductors and supply chain disruptions. Operating Profit increased year-on-year due to higher revenue and profitability improvement in heat treatment and surface engineering, as well as vehicular turbochargers, in addition to the effect of the restructuring costs recorded in agricultural machinery in the previous corresponding period. Aero Engines, Space and Defense still faces a lingering COVID-19 impact on the civil aero engines business. However, revenue increased year-on-year both for engines and spare parts amid the moderate recovery trend.
The segment loss contracted due to profitability improvement per engine, as well as increased revenue of spare parts, despite the negative impact from the increase in sales of newly made engines with heavy burden on profit in early stage. I will explain the situation regarding civil aero engine and vehicular turbochargers using pages 9 and 10 respectively. Overseas revenue was JPY 227.5 billion, up 5.0% year-on-year, representing 44% of total revenue. Please turn to page 8. This is a breakdown by segment of the JPY 32.4 billion year-on-year increase in operating profit. Change in revenue had JPY 4.6 billion positive impact on the operating profit. This was mainly due to recovery from the impact of the spread of COVID-19 in heat treatment and surface engineering, as well as vehicular turbochargers.
In Aero Engine, Space and Defense, the change in revenue had JPY -0.4 billion impact, because the positive impact from revenue growth of spare parts in civil aero engines was pretty much offset by the negative effect from an increase in sales of newly made engines. Change in construction profitability pushed up the operating profit by JPY 7.7 billion. We assess this positive impact was attributable to steady progress in the initiatives aimed at improving the cost structure set forth in Project Change. The positive impact from the change in foreign exchange rate was JPY 1.7 billion. Change in SG&A pushed down the operating profit by JPY 5.2 billion, which was due to an increase in R&D expenses incurred to create growth businesses, as well as a rise in other expenses along with the recovery in sales.
change in other income and expenses had JPY 23.6 billion positive impact on the Operating Profit. The effect from the sale of assets, including the ex IT works in the first quarter, was booked in adjustment.
Please turn to page 9. The main graph shows civil aero engine changes of, in revenue, which is shown in bars, and spare parts transaction volume, which is shown in solid line on a quarterly basis. Air travel demand in domestic flights and short-haul international flights have been recovering in each market, especially North America and Europe, where vaccination ratio has been getting higher, and accordingly, our civil aero engine spare parts business has been recovering on an overall basis. Although the speed of recovery differs depending on the model of the aircraft. Please turn to page 10. Vehicular turbocharger business changes in sales in volume and revenue by market on a quarterly basis.
Impacts caused by semiconductor shortage have been surfacing from Q4 in the previous fiscal year, centering around China, not only because it has been taking so long to see a recovery, but also because of the supply chain disruption. Auto OEMs have been reducing their production, which has been negatively affecting our sales. Our sales in China, Europe, and in Japan have decreased on a quarter-on-quarter basis as a result. Page 11, please. Finance income and costs. Foreign exchange gains have improved from the previous fiscal year. Change of the FX rate, as you see in the chart, at the end of Q2, yen became weaker against U.S. dollar than expected, which has had a positive impact on our income. Share of profit of investment accounted for using equity method was roughly the same as the previous fiscal year.
Share of profit in Japan Marine United was a small positive as a result of contribution made by weaker yen being offset to a certain extent by higher steel price. Please turn to page 12, consolidated statements of financial position. Total assets decreased by JPY 58.5 billion. Although inventories increased, good progress in trade receivable collection was made, and cash on hand was used to repay interest-bearing liabilities. Outstanding interest-bearing liabilities, as shown in the middle, was JPY 570.4 billion, decreased by JPY 35.4 billion from the end of the previous fiscal year. Total equity was JPY 341.5 billion, increased by JPY 13.7 billion from the end of the previous fiscal year.
All in all, debt-to-equity ratio was 1.67 times, and ratio of equity attributable to owners of parent was 17.9%, both improved from the previous fiscal year. Please turn to page 13, consolidated cash flows. Cash flows from investing activities was positive JPY 2.7 billion. Major factor was asset sales to create growth businesses. As a result, free cash flow was JPY 2.9 billion, increased by JPY 80.2 billion from the same period in the previous fiscal year. Please turn to page 14. Upper half on this page are actual results of R&D, capital expenditure, and depreciation and amortization.
Lower half on this page shows overseas sales by region. Now let us share our forecasts of the consolidated results for fiscal 2021. Please turn to page 16. No change with our full year forecast on a company total basis from our existing forecast as you see on the page. All in all, we have been able to perform steadily up to the end of Q2, but due to the uncertainty over our business environment such as prolonging semiconductor shortage, supply chain disruption, and increasing material costs and logistic fees, we are maintaining the existing forecast, including the cash flow forecast. No change with the foreign currency assumption. We are assuming 1 US dollar to be 105 yen. Foreign exchange rate sensitivity for US dollar, 1 yen move will have roughly JPY 500 million impact on our operating profit as you see below.
Please turn to page 17, orders received forecasts by segment. Total remains the same, but JPY 10 billion increase or decrease in two segments based on the situation up to the end of Q2. Page 18, please. Revenue and Operating Profit forecast by segment. No changes on a company total basis, but upward or downward revisions in some of the segments based on the ongoing business environment. Let me explain the details in revenue forecast changes on this page. Changes in operating profit will be explained on the next page. Revenue forecast for Social Infrastructure and Offshore Facilities has been downwardly revised by JPY 10 billion due to delays in construction work, especially in overseas, leading to some sales recognition push out to the next fiscal year.
Revenue forecast for Aero Engine, Space & Defense has been upwardly revised thanks to weaker yen, making positive contribution to the civil aero engine business. Please turn to page 19, reasons for the changes in operating profit full-year forecast by segment. Operating profit forecast for Social Infrastructure and Offshore Facilities was downwardly revised due to the sales decrease following the delay in construction work and price hikes in steel and ocean transport cost. Operating profit for Industrial Systems and General-Purpose Machinery was also downwardly revised due to the decrease in auto production following the semiconductor shortage and supply chain disruption. Operating profit for Aero Engine, Space & Defense has been upwardly revised thanks to weaker yen.
Although spare parts sales is expected to keep recovering in Q3 onward, since there is still uncertainty over the air travel demand in the future, this latest forecast is not reflecting this additional potential upside. Although some of the potential risk factors among the non-aero engine business segments have been materializing during Q2, we are being able to recognize operating profit steadily on a company-wide basis. We believe even aero engine space and defense segment has been able to achieve a good progress against our business plan under a circumstance that spare parts business has been able to enjoy a gradual recovery trend. Having that said, we have made a decision not to revise a company total full year forecast at this moment because of the ongoing uncertainty over the semiconductor shortage, supply chain disruption, material price hikes, and air transportation demand recovery speed.
Since we are still not being able to figure out the size of positive impact to be achieved by our initiatives to expand the life cycle business and to reinforce our cost structure. We will continuously accelerate the speed to work on our performance recovery drivers initiatives and to strengthen the earning foundation on a company-wide basis. The size of our asset sales is expected to be in line with our plan. In addition to the ones we have already sold, we will keep working on the one or ones currently under consideration to secure the financing to create growth businesses. Lastly, on page 30 and 31 in the appendices, there are information on our initiatives to create growth business under Project Change. Please take a look later. Now let me talk about management review and IHI Group's ESG management. First is the management review.
I'd like to talk about it by mainly focusing on the progress we are making in Project Change, which is the project we started to work on last year. As you see on page 2, I will first talk about the overview of Project Change, followed by second quarter review, business area progress, and finally, growth business creation. Again, first is the overview of Project Change. Starting from the positioning of Project Change, the project is retaining the basic concept under the Group Management Policies 2019, which is a three-year plan for fiscal 2019, 2020, and 2021. While maintaining the basic concept, now Project Change has been under preparation and transformation to reform the business to catch up with the changing business environment following the COVID-19. Project Change is focusing on several pillars.
One of them is return to growth trajectory, under which we are further strengthening earnings foundation and expanding life cycle business. Another pillar is financial strategies, under which we are strengthening cash flow generation. The thinking we have under Project Change, as you see on the page, is management that embraces ESG values. I will come back to the details later when I talk about IHI Group's ESG management. Page four, please. Second quarter review. As discussed by CFO Mr. Fukumoto, we have been facing external factors such as soaring raw materials and transportation costs. In the meantime, we have been able to progress steadily with our measures to strengthen cost structure and to expand life cycle businesses. As a result, all of the four segments could achieve revenue growth and three segments except for social infrastructure and offshore facilities could achieve operating profit growth on a year-on-year basis.
The reason for the OP decline in social infrastructure and offshore facilities was, as mentioned, rising steel prices and transportation costs. As we did in the previous fiscal year, we have sold fixed assets to finance our future investments. Let us tell you that even excluding the fixed asset sales, we have been able to be profitable. If you take a look at the waterfall chart on the page, there is recovery from pandemic, which is the second from the left. You may wonder why it is so thin. In fact, civil aero engine business is recovering significantly. The reason is because contribution coming from the sales increase in civil aero engine spare parts business will be significantly offset by the newly made engine business, which is also growing.
Because of the nature of this business, i.e., because initial phase burden is heavy with this business, the growth of the business is going to have a negative impact on the profit. We have been working on various initiatives to strengthen cost structure under Project Change, and now the effort has been starting to make significant contribution on our profit. Moving on to expansion of life cycle businesses. The businesses have been growing under each of the four segments. There are specific numbers to explain the steady growth. If we look at the life cycle business revenue growth among the three non-aero businesses, the revenue has grown by 12% on a year-on-year basis, and by 24% compared to fiscal 2019. Other two big chunks are sales of assets and others. Others includes increase in SG&A, increase in expenses following the sales increase, and risk buffer.
As we have been discussing, we have been able to make progress in various initiatives, for sure during fiscal 2021, with which we believe we are making a steady progress to achieve our business targets during fiscal 2022. From now on, let me briefly touch upon each business segment. First is Aero Engines, Space, and Defense. If you look at our business environment, air transportation demand for domestic flights and short-haul international flights has been on a recovery trend, especially in North America and Europe, where the vaccination rate is becoming higher. Demand for long-haul international flights is still trending at a low level because of the emerging variant strain and ongoing restrictions to enter foreign countries. On the other hand, demand in international cargo transportation is now stronger than pre-COVID-19.
From fiscal 2022 onward, we are expecting a growth in the engine maintenance business. Following the increase in flight operation as we see recovery in international flight demand, in addition to domestic flight demand as vaccination rate gets higher in the future. Talking about the progress in Project Change we are making under Aero Engine, Space and Defense segment, first is the recovery from pandemic. Aviation demand has been recovering, and our spare parts sales have been recovering accordingly, although gradually, but on a steady manner. Second is to strengthen cost structure. We have been able to boost the productivity with new engines by procuring materials and parts just in time and by digitizing processes to stabilize them. Third is to expand life cycle business. We launched operation at Tsurugashima Works on June 18th.
Now we are making good progress in reinforcing the structure to take advantage of recovery and growth in civil aero engine business. We believe that we should recover further in and beyond fiscal 2022 as aviation demand continuously trends upwardly. We will prepare for rapid demand recovery by becoming more cost competitive and building more efficient structure based on robust quality assurance step-up. In the meantime, we will continuously work on initiatives to further reduce fixed costs and improve productivity. Let me move on to Resources, Energy, and Environment. Now, international decarbonization demand is propelling fuel switching in power sector. There is especially a rapid shift towards biomass-based fuel.
At Carbon Solution SBU, shift towards life cycle businesses has been taking place, and we are working on a lot of nuclear power-related projects to let the clients meet the renewed guideline and to make power plants more resistant to earthquakes. On the other hand, our ongoing concern is the EPC business in Southeast Asia and engine-related life cycle businesses overseas, because these businesses are still very slow under COVID-19. We are expecting to see a recovery in these businesses in fiscal 2022 onward. Moving on to Project Change progress. First is to strengthen the cost structure. We have successfully reinforced project risk management in all project stages and been able to eliminate earnings downswings, meaning we no longer have non-profitable projects. To expand life cycle businesses, we have reallocated our people to life cycle businesses and nuclear power business.
On top of that, we are making progress in developing life cycle businesses using digital technologies such as boiler lifetime analysis, inspections using drones, and advanced operation system. Next is business structure reform. We have entered into SMR, small modular reactor market, by investing in NuScale Power of the United States. On the other hand, we have transferred IHI Plant Services pharmaceutical EPC business to JGC Corporation. Talking about the future initiatives, we will accelerate resources shift to carbon neutral projects and accelerate life cycle business expansion, especially in overseas markets. We are also expecting to see major progress being made in Southeast Asia projects in fiscal 2022 onward since we are already starting to see signs of growing orders. Next is industrial systems and general purpose machinery business. All businesses have been recovering from pandemic-induced downturn.
We need to carefully monitor automotive demand recovery in the second half since the vehicular turbocharger business have been affected by semiconductor shortage and supply chain disruption due to emerging variant strain of COVID-19. We believe we will see recovery from now on, but some people are expecting the negative impact on the industry to continue till mid-FY 2022. We will keep a close eye in the situation. In the meantime, power shortages in China have affected our production in some of our businesses. We have been able to keep the size of negative impact very small for the time being by asking people to work night shift. Again, we have to continuously monitor the situation because it can cause negative impact on auto production in the future. Moving on to progress in Project Change. Recovery from pandemic.
Sales of Thermal and Surface Treatment in Europe and Rotating Machinery sales in Japan and China recovered to pre-pandemic levels, strengthening cost structure, each SBU has been successfully lowering the break-even point by reducing the procurement cost, et cetera. Thermal and Surface Treatment and plant businesses have successfully shortened the lead time by maximizing the standardization and minimizing the customization in the designing process and by using information and communication technologies.
Moving on to future initiatives, we believe it is important to respond flexibly to automotive demand recovery. We will reinforce earning structure by shifting resources faster to life cycle businesses, and we will leverage information and communication technologies to optimize services network. Next, on social infrastructure and offshore facilities. Due to the aging of social infrastructure, demand for domestic maintenance work is forecast to be steady. Renovation and repair works are scheduled mainly by express companies. As explained earlier by General Manager of Finance, a rise in marine transportation costs due to global shortage of containers, as well as soaring steel prices, have been impacting bridges business. Other than that, prolonged military rule in Myanmar and COVID-19 pandemic impact across Asia are hampering progress in some overseas construction projects.
In terms of progress of Project Change, to expand life cycle business, it is important to secure orders steadily for bridge seismic reinforcement and repair work. To strengthen the cost structure, we will promote digital transformation, automation, and mechanization to achieve labor saving in all the processes of bridge construction, with a view to shortening lead times and reducing manufacturing costs. Future initiatives include steady implementation of large overseas projects where there are still concerns to be resolved, allocating resources flexibly to maintenance operations as well as disaster prevention measures, and proactively securing infrastructure improvement project work with focus on flood control measures and the Japanese government's National Resilience Plan. Next on creating growth businesses. We are undertaking various initiatives to create growth businesses.
On the page, there are two typical examples, realizing ammonia value chain and carbon recycling, which I will explain more in detail later in the IHI Group's ESG management section. Just briefly touching on the ammonia value chain, we are promoting this initiative in earnest by working closely with companies and institutions, both home and abroad, to cover all the aspects of the value chain, including production, transportation, storage, and utilization. In summary, I would like to say that company-wide, we are steadily undertaking Project Change initiatives to achieve solid progress in strengthening the earnings foundation, expanding life cycle businesses, and reinforcing cash generation capabilities. We will strive to accelerate our strategy to create growth businesses amid changes in business environment and make steady progress to achieve the operating profit margin of 8%, the management targets set in Project Change. With that, I will conclude the management review.
Next, I will explain IHI Group's ESG management. In Project Change, ESG management has been positioned as a core value in managing the business. From January this year, discussions have been held with external directors and internal staff of various levels on how we should promote ESG management within the IHI Group. Today, I would like to explain the overview of the IHI Group's ESG management, how we are tackling climate change, which is one of the most important challenge, how we are transitioning to a carbon-neutral economy associated with our initiatives in the E part of ESG, and then I will explain the S part, which are related to upholding human rights and building a diverse and inclusive workforce. I will now go over the IHI Group's ESG management.
First of all, IHI's management philosophy, as you can see on the slide, there are two concepts: to contribute to the development of society through technology, and human resources are our single most valuable assets. IHI has had this management philosophy from a long time ago. Even before the birth of the word ESG, we had positioned ESG at the core of management. This is where we started, and in our history of 168 years since the foundation, IHI's businesses have been resolving social issues. Based on that understanding, IHI Group will help resolve social issues through our businesses to achieve a sustainable society. In the center of the slide, there are three circles which are identified as social issues in Project Change. IHI will resolve these social issues, and doing so itself is the value of IHI Group.
By promoting ESG management, we focus on enhancing the corporate value and win trust from stakeholders. For those purposes, we will strive to improve the effectiveness of the board of directors. Also, we are determined to identify and implement measures aimed at upholding human rights and building a diverse and inclusive workforce, as we believe they are important to enhance the corporate value. Next, the most important challenge now, which is to tackle climate change. We aim at cutting CO2 emissions to achieve carbon neutrality, one through business operations and another through products and services. First, through business operations, we will cut emissions through production by adopting pioneering technologies such as adoption of ammonia gas turbines and the energy management system at our own works. We will also explore and promote fuel conversion and renewable energy usage. To cut emissions through procurement, we will proactively partner with eco-friendly business partners.
Under this section of cutting emissions through products and services, there are two words, transition and transformation, which I will explain later using examples. IHI Group is committed to promoting IHI Carbon Neutral 2050 with a view to achieving a carbon-neutral value chain by 2050. First, in terms of making a transition to a carbon-neutral economy, we will realize carbon neutrality through our products and services by boosting efficiency at existing power plants as we have been already engaged in. We will improve power plant efficiency by remote monitoring, as well as reconstructing and retrofitting plants built by other companies. In addition, we will promote biomass conversion, which is increasing in recent years. As for power supply systems employing renewable energy, we are working on Terrasun in our subsidiary in North America.
We already launched a system with a proprietary control system to adjust supply and demand for renewable electricity, employing storage batteries for solar power and the energy management system, and sales are steadily increasing. As for aviation parts, we are accelerating development of composite fan blades and ceramic matrix composites technology. Moving on to turbochargers, we started development of vehicular turbochargers for fuel systems from 20 years ago. Ahead of peers in the industry, we launched Electric Turbocharger for fuel cell systems in 2018. Next on this page, I will talk about transformation to realize a carbon neutrality with our technologies. First, co-firing ammonia in boilers and gas turbines. Demonstration testing is done together with JERA at Hachinohe Thermal Power Station, aiming at 20% co-firing in 2024, and further up to 60%, and eventually up to 100%.
IHI became the world's first to stably attain a 70% liquid ammonia co-firing ratio on calorific basis on a gas turbine. We would like to collaborate with other companies so as to cover the whole value chain, including receiving and transportation. As you can see a diagram at the bottom of the page. This page is about carbon recycling. We had already delivered the first methanation unit to our customer, despite the size still being small. The unit uses a catalyst with high reaction efficiency and durability, which was developed in Singapore. Since reaction heat is used in methanation, there is an advantage that it can be integrated with the CO2 recovery equipment. Our intention is to start small and grow larger, and we believe methanation unit will play a significant role in achieving carbon neutrality.
Next, another interesting topic to share with you, which is our initiative to commercialize tropical peatland consulting and high-quality carbon credits through a business alliance with Sumitomo Forestry. This initiative will not only help achieve carbon-neutral economy, but also contribute to disaster prevention and mitigation, as well as biodiversity. We have set up an exhibition booth and are making presentations at COP26. Next on human rights. We formulated the IHI Group Human Rights Policy. We will be undertaking human rights due diligence. As you can see, six key human rights challenges have been identified, which are particularly important. We are committed to tackling these challenges. Another area of focus is strengthening supply chain management. We will steadily undertake socially responsible procurement. We will promote all these initiatives sincerely and establish a structure to integrate human rights risk management globally.
Now on building a diverse and inclusive workforce. This, we believe, is a driver for enhancing the corporate value, as well as a source for achieving sustainability. We have been implementing various initiatives from last year, and we will further accelerate our initiatives that are shown on the slide. We will also strengthen globally applied frameworks and programs in this area. We believe promoting ESG management will enhance the corporate value. We will have our board of directors monitor the progress of our ESG initiatives so that we can win trust from our stakeholders. With that, I would like to conclude my explanation.