This is Maruyama in charge of Finance and Accounting of IHI Group. I will explain IHI Group's financial results for the Q1 of the fiscal year 2020 based on the PowerPoint presentation materials disclosed at 3 p. M. Today. Please turn to Page 4.
This slide shows the consolidated results, including orders received and the income statement. The accounting standard for revenue recognition is applied from this fiscal year, and the effect of applying the standard is indicated at the top left corner for relevant items. Orders received were 167,400,000,000 yen down 52,500,000,000 yen year on year. As shown at the top right, the average exchange rate for sales in the quarter was 107.05 yen to the U. S.
Dollar. There was 3.39 yen appreciation from 110.44 yen of the previous corresponding period. Net sales decreased by 62,600,000,000 yen to 218,500,000,000 yen. Net sales declined by 22.3 percent year on year, mainly due to the impact from the spread of COVID-nineteen and also as a result of the effect of applying the accounting standard for revenue recognition. Operating profit was minus 9,200,000,000 yen down 10,100,000,000 yen year on year, mainly due to lower sales despite efforts to reduce fixed cost and others.
Although the amount of loss narrowed due to improvement of share profit and loss of Equity method affiliates, ordinary profit was minus 7,900,000,000 yen Profit attributable to owners or parent was a loss of 7,600,000,000 yen Please turn to Page 5 for orders received and the order backlog by segment. All the reportable segments reported year on year decline centered on Industrial System and General Purpose Machinery. The decrease in Industrial System and General Purpose Machinery was due to the reverse effect of large scale projects of the transport machineries business and the logistics and industrial systems business recorded in the previous corresponding period as well as the impact from the spread of COVID-nineteen in the vehicular turbochargers business. Overseas orders received was 51,200,000,000 yen representing about the same ratio as last year at 31% of total orders. Order backlog totaled 1,381,100,000,000 yen Please turn to Page 6 for net sales and operating profit by segment.
This slide also shows the effect of applying the accounting standard for revenue recognition at the top left corner for relevant items. In Resources, Energy and Environment, net sales were at the same level as the previous corresponding period due to the increase in the boilers business despite the decrease in the plants business as a large scale construction project in the United States entered its final phase. Operating loss has been decreasing due to the reverse effect of the deterioration of profitability for some project in the boilers business and the power systems business in the previous corresponding period. In social infrastructure and offshore facility, sales were at the same level as the previous corresponding period due to the decrease in the bridges and border gauge business despite the increase in the transport systems business and the urban development business. Operating profit decreased overall for the segment with an increase in operating profit on higher sales in the Urban Development business and a decrease in operating profit on lower sales in the bridges and border gates business among others.
Sales in industrial system and general purpose machinery decreased due to lower sales in the vehicular turbochargers business and the thermal and surface treatment business, which were affected by the spread of COVID-nineteen. Operating profit decreased due to lower sales. Sales in Aero, Engine, Space and Defense decreased due to the effect of applying the accounting standard for revenue recognition in addition to the impact of the decline in demand for aero transportation owing to the spread of COVID-nineteen in the civil aero engines business. Operating profit decreased due to lower sales in the civil aero engines business. Overseas sales were 82,900,000,000 yen representing 38% of total sales.
The year on year decline in the overseas sales ratio is attributable to lower sales of civil aero engines, vehicular turbochargers, among others. Please turn to Page 7. This is the breakdown by segment of the 10,100,000,000 yen year on year decline in operating profit. Change in net sales had 18,800,000,000 yen negative impact due to the substantial decline in industrial system and general purpose machinery as well as aero, engine, space and defense owing to the impact from the spread of COVID-nineteen. The impact of the spread of COVID-nineteen on our businesses is explained on the following slides.
Change in construction profitability brought about 5,100,000,000 yen positive impact, which is attributable to the reverse effect of the deterioration of profitability recorded in the previous corresponding period for some projects in the boilers business and others in resources, energy and environment. Progress in large scale boiler project is described on Page 30. The negative impact from the change in foreign exchange rate was 300,000,000 yen A change in SG and A had a positive impact of 5,400,000,000 yen in total due to ongoing reductions in R and D expenses and the fixed cost as countermeasures against the spread of COVID-nineteen. The negative impact from applying the accounting standard for revenue recognition was 1,500,000,000 yen due to deducting compensation for damage and other from sales, which used to be recorded as non operating expenses.
Please turn to Page 8. The impact of the spread of COVID-nineteen, which has been the reason for the decrease in our net sales and operating profit. Starting from the civil aero engine business, Sales of engines and spare parts has decreased significantly, owing to the drastic decline in demand for aero transportation and the deterioration of business conditions for airlines. Although demands for aero transportation on domestic routes are expected to lead the recovery, the recovery speed will vary by region. As for international routes, due to various restrictions on immigration, Speed of recovery has been slower than domestic routes and it is expected to take several years to make a full recovery.
Although that is the assumption we have for the time being, we also believe that once the passenger demand starts to pick up in the industry, our aftermarket business should achieve a rapid recovery since IHI engines are mounted on relatively new type aircrafts with lower operating costs and higher fuel efficiency, airline companies are likely to prioritize the aircrafts with IHI engines when they increase the number of flights. Next is vehicular turbocharger business. Although the total number of deliveries has decreased following the decline in global auto sales and the suspension of auto manufacturers operation, the number of deliveries in China has already started to increase as their economy has become active. We are also starting to see a sign of recovery in the U. S.
And Europe since auto manufacturers situation, Aichi Group has been taking countermeasures by temporarily freezing or controlling the expenditure on capital investments and research and development by reducing total cost, fixed cost and inventories and by reallocating human resources to the growth areas and life cycle business. Depending on the future business environment and demand recovery situation, we will further strengthen the effort we are making. As for the financial conditions, we have secured enough financial liquidity by securing diversified financial instruments, including commitment line contract and overdraft facility arrangement with our major banks, commercial paper, etcetera, in addition to cash and cash equivalents, although the readout is not available on this page. Please take a look at Page 9. This is an additional info we are providing to you, which is net sales generated by Civil Aero Engine Business by quarter.
Net sales generated by Civil Aero Engine Business in Q1 fiscal 2020 was 20,400,000,000 yen you see on the right hand side. But if we exclude the impact of adopting revenue recognition accounting standard, net sales was 34,900,000,000 yen a decrease of 46.4 percent from Q1 2019. Please turn to Page 10. Vehicular turbocharger business number of delivery and net sales by region by quarter. If we look at the total number of deliveries, Q1 2020 has hit the lowest level among the past 5 quarters.
But if we look at the breakdown of net sales by region, we can tell that China, which is the red portion of the bars on the page, has already been on a recovery trend. And although we do not have monthly breakdown on this page, we are also starting to see a sign of recovery in the U. S. And Europe in May June. Please turn to Page 11.
You will see the countermeasures IHI has been taking following the COVID-nineteen situation. We are surely executing the countermeasures as planned on a timely manner. We will continuously promote taking countermeasures depending on the business environment in a flexible manner and revisit the countermeasures to take when needed. Please turn to Page 12, nonoperatingincome and expenses. Share of profit and loss and equity method affiliate was 2,200,000,000 yen up 2,900,000,000 yen from the same period in the previous year.
Japan Marine United, which incurred a loss in Q1 2019, has recognized positive profit in Q1 2020. Please turn to Page 13, consolidated balance sheet. As end of Q1 2020, interest bearing liabilities was 487,200,000,000 yen as you see in the middle of this page, which is approximately the same as the end of fiscal 2019. Debt to equity ratio was 1.31x. Debt equity ratio was 1.31x.
Equity ratio was 20.6 percent, up 1.8 points from the end of fiscal 2019. Major factor was the retained earnings at the beginning fiscal 'twenty increased by 27,400,000,000 yen by adopting revenue recognition accounting standard. Please turn to Page 14. Consolidated cash flow. Cash flows from operating activities was negative 29,100,000,000 yen.
Cash flows from investing activities was negative 26,200,000,000 yen 14,000,000,000 yen additional cash out compared to the same period of the previous year. Although we are temporarily freezing and controlling the capital expenditure and other investment for the current fiscal year, major factor for the increase was the newly built plant in Tsudokashima whose construction was completed in 2019. Free cash flow combining the cash flows generated by operating and investing activities was negative 55,400,000,000 yen. Please turn to Page 15. Upper half of this page are the actual results of R and D, CapEx depreciation and amortization.
R and D and CapEx have decreased on a year on year basis following the temporarily freeze and control on the overseas sales figure we had on page 6. Sales in North America decreased significantly as a result of sales decline mainly in civil aero engine business. Next is the forecast for the consolidated results for fiscal 2020. Please turn to Page 17. The consolidated forecast for the year ending March 2021 are undetermined since it is difficult to estimate the reasonable size of impact on our business under the current circumstances where we still do not have a clear view on when the spread of COVID-nineteen will come to an end.
Once the situation improves and enables us to have more clear view on the potential size of the impact, we will develop the forecast and announce them promptly. Page 18 onward are the financial results by segment, which I have already covered in my presentation, so let me skip. Page 27 onward are appendices. Please take a look later. Talking about the consolidated forecast.
I just touched upon it briefly, but as of now, let me share how IHI is thinking on this forecast. First of all, the COVID-nineteen situation, as you know, has been changing day after day, and still the environment surrounding our business is unclear. And since we do not know when this infection is going to end, it is difficult to come up with a reasonable forecast. So as we did in May, we are saying that we are not determining the forecast as of today for fiscal 2020. For the time being, it's difficult to tell the numbers.
Having that said, when we are closing the first half, we are likely to have more visibility on the potential impact on a full year basis and the size of effect we can enjoy by taking countermeasures. So at the latest, when we announced the Q2 result, we'd like to share the full year forecast. Based on the demand forecast coming from 3rd parties, we are estimating that the businesses going to be impacted by the COVID-nineteen are the Civil Aero Engine Business and vehicular turbocharger business, Especially the civil aero engine business, which is one of the pillars of our businesses, it is unfortunately inevitable that we are this business is going to be affected. We are going to continuously pay close attention to the situation. Talking about the civil aero engine business.
Since COVID-nineteen has been spreading out across the world, it is negatively affecting the travel demand significantly. And accordingly, airline companies' business conditions have been deteriorating, which is likely to have negative impact on our sales. According to IATA, transportation demand forecast, The situation has been further deteriorating compared to the time when we announced the Q4 result in May. The recovery speed is now taking longer than we were expecting. And now we are expecting that we will see a recovery by 2020 4, no longer by 2023.
And now we are expecting that it will take till 2024 to see a full recovery. Because of the rapid decrease in transportation demand and deteriorating airline company business conditions, we are expecting the demand for I, our high profitable spare parts business and aftermarket business, demand is likely to decrease. And because of this less demand in the market, we're also seeing a trend where aftermarket is seeing increasing discount, which is likely to have negative impact on our earnings. Currently, we are conducting hearings with OEMs who are our business partners to understand the situation by model and to understand the current trend in the aftermarket business to scrutinize how the situation is likely to impact our business. As for the vehicular and turbocharger business, as I mentioned earlier, sales to China has been already recovering to the level prior to COVID-nineteen.
Compared to last year when our sales were not necessarily good, Q1 results was better than the previous year. On the other hand, in Japan, Europe, U. S. And in Thailand, we've been able to resume the production from June in general, but the sales have been decreasing still on an year in year basis. The question is whether the sales growth for China is going to be strong enough to offset the performance in other markets, which is something we are currently scrutinizing.
This concludes my presentation. Thank you very much.