Good afternoon. My name is Hiromi Ohshima. I am responsible for group finance and accounting for IHI Group. I am going to talk about the second quarter results for fiscal year 2025. First, allow me to take you through the highlights of the earnings for the first half. Please take a look at the upper section: summary of the second quarter results. Orders reached JPY 893.4 billion, driven by significant growth in demand for nuclear energy, etc., record high for the second quarter. Revenue was JPY 713.6 billion, and operating profit was JPY 69.4 billion, marking year-on-year decline in both revenue and profit. This was due to the impact of a rebound from large-scale projects in the same period last year and the effects of business transfers. Net income was JPY 55.9 billion, driven by favorable effects and improved tax expenses, marking the highest net income for the second quarter.
Next, let's take a look at the forecast for fiscal year 2025. We have revised up the orders by JPY 60 billion- JPY 1.85 trillion, reflecting further growth of nuclear energy and defense systems, revised down revenue by JPY 10 billion- JPY 1.64 billion, reflecting the latest status. We revised up operating profit by JPY 10 billion- JPY 160 billion to reflect steady growth in the Civil Aero Engines, revised up net income as well by JPY 5 billion- JPY 125 billion. Our outlook as a result is record high performance in all accounts: orders, revenue, operating profit, and net income. Now, let's take a look at the overview of second quarter results in a little more detail. As I mentioned earlier, while we saw record high orders and decline in revenue and operating profit due to rebound from large-scale projects in the previous period and profitability deterioration of the overseas carbon solutions business.
However, we posted record high net income due to FX revaluation, improved equity-asset investment gains, for example, of JMU, and improvement in tax expenses. Operating cash flow decreased significantly, primarily due to increase in the payments related to powder of metallurgy and tax. It is in line to our plan. Next, please take a look at breakdown by segments. Top right is orders. As you can see, orders for energy business increased significantly, driven by large domestic projects in the carbon solutions business and nuclear energy. Bottom left shows revenue. Although the defense systems in aero business expanded significantly, revenue declined due to rebounding impact of the last year's large-scale projects in energy and transfer of the industrial system and general purpose machinery businesses. Bottom right is operating profit.
Despite gains from the transfer of industrial system and general purpose machinery businesses, profit declined due to deteriorating profitability in the overseas carbon solutions business and the negative FX impact on aero business. As this fiscal year's operating profit is driven by significant one-off factors, I am going to use this waterfall to show the main drivers to give you an idea on the underlying business performance. The second blue bar from the left, positive JPY 13.9 billion, is a net amount including gains from business transfers and expenditure related to structural reforms completed in the first half to offset the gain. The third bar from the left, negative JPY 13.9 billion, represents the FX impact carried over from the previous fiscal year, mostly offsetting the positive one-off impact. The right side illustrates the changes excluding one-off factors and FX.
As you can see, the rebounding impact of delayed maintenance costs from previous fiscal year and deterioration in profitability of overseas subsidiaries in the energy segment pushed down the overall operating profit, but the civil engine business demonstrated robust growth. Let us take a look at performance of each segment in a little more detail. First, the Resources, Energy, and Environment segment. Overall, the revenue and profit declined. Revenue declined due to the rebounding impact of large-scale projects we had in previous fiscal year. Operating profit declined significantly, primarily due to deteriorating profitability in the overseas carbon solutions business. As mentioned in the first quarter results presentation, our overseas energy subsidiaries are struggling, dragging down the performance. We have already initiated structural reforms to aim for a recovery as soon as possible. Nuclear energy and power systems business are performing solidly, backed by robust demand.
Particularly in nuclear energy, we have already completed capturing the profits generated by costs posted in the first quarter in advance. Next, I'll touch on the Social Infrastructure segment. Our performance is seeing stable progress in line to our plan, primarily driven by bridge and water gate business, resulting in an increase in both revenue and profit overall. We are being selective to focus on higher profitable projects in bridge and water gate business, and the effort is beginning to pay off. Operating profit increased overall, driven by major improvement in profitability of the bridges and water gates business, achieved by strongly focusing on higher profitable projects. This was partially offset by the red bar, the loss posted in advance from divestiture from transportation systems business, which has already been decided. We have integrated bridge and disaster prevention water gate businesses to establish IHI Infrastructure Systems Co., Ltd.
The new company has started operations on November 1st. We shall continue to strive to strengthen competitiveness of the business by further creating synergies through integration.
Next, the Industrial Systems and General-P urpose Machinery segment. Three business transfers were completed during the first half, resulting in an overall decline in revenue but an increase in profit. In terms of business conditions, the Vehicular Turbochargers business continued to improve profitability, supported by better sales pricing and reductions in fixed costs. That said, we recognize that the environment surrounding the vehicular turbocharger business remains challenging, and we will continue to monitor and promote to secure profit growth in the second half. As for the impact of U.S. tariffs, we currently expect the annual impact to be minimal. Lastly, in the Aero Engine, Space, and Defense segment, overall, we recorded higher revenue but lower profit. Revenue increased driven by the expansion of the defense business, whose profit contribution is expected to materialize in the second half.
On the operating profit side, the aftermarket business for Civil Aero Engines continued to perform well, supported by robust growth in spare part sales. However, net income was weighed down by maintenance costs that had been deferred from the previous fiscal year and by changes in FX rate. That said, the overall business trend remained strong, with steady growth continuing. As for the U.S. tariff impact, we now expect that Japanese civil aircraft and aircraft parts will not be subject to tariffs. Therefore, full-year impact will be minimal. However, the industry supply chain remains under pressure, and we are continuing to work closely with our partners to address these challenges. This page and the following one are reference materials that we share each quarter. You can see that the aftermarket business is steadily expanding. Please take a moment to review them later. Next, let me touch on the balance sheet.
Thanks to the accumulation of net income in the first half, the equity attributable to owners of the parent improved to 23.1%. Although inventories have increased as we ramped up production in line with the expansion of the civil aero engine and defense businesses, we will work to reduce inventories as well as overall working capital toward the end of the fiscal year. We will further improve the balance sheet and strengthen our financial position. Next, turning to cash flows. Operating cash flow decreased significantly by JPY 49.6 billion from the previous year, but this movement is in line with our company plan. Although there was some improvement in working capital, we saw a large outflow related to tax payments as we shifted from a refund position in the previous fiscal year to a payment position this year. Therefore, the variance became large.
In addition, increased expenditures related to powder metallurgy issues contributed to the overall decline. Investing cash flow remained roughly on par with the same period of the previous year, and we will continue to steadily execute necessary investments for future growth. In the second half, we will step up our group-wide efforts to further strengthen cash flow generation. Now, let me move on to the forecast for a consolidated performance for FY 2025. As mentioned at the beginning, we have had revenue revised downward, while all other forecasts revised upward. We have revised orders upward by JPY 60 billion, driven by the expansion of the nuclear energy and defense businesses. We see this as a clear reflection of the strong expectations and confidence our stakeholders have in our company.
We have revised revenue downward by JPY 10 billion based on first-half results, while revising operating profit upward by JPY 10 billion, mainly in the aero segment. We have also revised net income upward by JPY 5 billion. For FY 2025, we now expect to achieve record-high orders, revenue, operating profit, and net income. This slide shows the factors behind the upward revision to operating profit. As I mentioned earlier, in the energy segment, we made a downward revision due to weaker profitability in overseas businesses. In the Social Infrastructure segment, we also made a downward revision reflecting the finalization of losses related to business transfers. This was in line with our original expectation at the beginning of the year. These declines, however, were expected to be offset by gains from asset sales, the reversal of restructuring reserves previously set aside at headquarters, and reductions in corporate expenses.
As shown on the right side in blue, with upside revisions breakdown in the aero business, we made an upward revision reflecting favorable FX results in the first half and the strong performance of the civil aero engine business. As a result, we have revised operating profit upward by JPY 10 billion at the overall company level. This slide shows the segment-by-segment details of the forecast revisions I just explained. Please take a moment to review them later. That concludes my presentation on the financial results. Next, our President, Ide, will provide a management briefing.
I shall now take over to present to you the management briefing. I am going to talk about these two topics today. First, I'd like to talk about the progress of Group Management Policies 2023 as fiscal year 2025 is the last year of the plan. This page illustrates the main initiatives for Group Management Policies 2023. In strengthening growth and development-focused businesses, we have implemented measures to enhance our growth businesses, such as reinforcing MRO and expanding SMR manufacturing capabilities. As seeds for future growth businesses, we have pursued initiatives in the green ammonia value chain and strengthened partnerships for satellite constellation. Under overhauling the business portfolio, we have actively promoted business transfers, as you may well know, and as part of our structural reforms, strengthened the business structure of the Vehicular Turbochargers business and enhanced competitiveness through the integration of our bridge subsidiaries.
In improving capital efficiency, strengthening our financial foundation is the top priority of our reforms. We have carried out the sale of investment properties, policy shareholdings, and shares in affiliated company. The numbers are the outlook for main financial KPI for this fiscal year. Through several years of initiatives to eliminate loss-making businesses and projects, steady progress in expanding lifecycle business, a service-oriented business, and significant growth in Civil Aero Engines, space, and defense business area, we expect to achieve record highs in orders, revenue, operating profit, and EBITDA, as indicated. Furthermore, as a result of the initiatives such as overhauling business portfolio and improving capital efficiency, we expect significant improvements in profitability and efficiency compared to the start of Group Management Policies 2023. Since we often receive questions about the progress of our structural reforms, we have likened our initiatives so far to climbing mountain.
While this is a subjective assessment, we believe we have climbed about 70%-80% of the way. First, we focused on eliminating loss-making businesses, particularly in the energy-related businesses. As a result, we have significantly reduced the risk of major profit declines. Next, we worked on overhauling our business portfolio, aiming to improve overall profitability while clarifying the growth strategies for each business, which will be explained later. As Ohshima has mentioned earlier, and as we presented in May, profitability enhancement of overseas carbon solutions business is an ongoing effort, which we shall further accelerate. The structural reforms of all other businesses are in final stage. Particularly, overseas CS business will need to promptly adapt to drastic changes in the market environment, mainly in Europe and the United States. I shall personally be engaged in this effort.
Going forward, we will optimize management resources, transition to the growth stage, and aim for sustainable growth. Next, I will talk about the future direction of each business area. First, on the future direction of resources, energy, and environment business area. This slide is on the changes in the key businesses since last fiscal year. In this business area, through overhauling business portfolio, we have reclassified the position of each business into three categories: growth business, stable revenue-based business, and restructured business. Regarding the nuclear energy business, which we presented as a candidate for growth business in May, we have now designated it as a growth business, taking into account the business environment and our strength. As shown in the table, the nuclear energy business has achieved significant growth in both orders and revenue, and we will continue to work on expanding the scale of this business.
The power systems business and the domestic carbon solution business, which have been positioned as stable revenue-based business, have maintained steady orders and revenue, as shown in the table. In particular, the power systems business has improved its operating margin through the structural reform and is expected to continue generating stable cash flow. Overseas carbon solution business is experiencing performance decline. The details will be provided on the next page. The graph on the left shows the trends in revenue and operating margin for this business. As explained in May, due to changes in the business environment for energy-related operations in Europe and the United States, profitability has significantly deteriorated. As a result, we have been accelerating structural reforms since the beginning of this fiscal year. While considering these initiatives, we plan to finalize the direction within this fiscal year.
However, since it will take time to complete the structural reforms, we expect the profitability to improve in the latter half of next fiscal year or later. This slide is on power systems business. The graph on the left shows the trends in revenue and operating margin for this business. Through initiatives such as focusing on models with high marginal profit and reducing fixed costs as part of our structural reforms, we have achieved a V-shaped recovery in operating margin. Our lifecycle business, where we can demonstrate our competitive advantages, still has considerable room for expansion, and we will continue to pursue further improvements in profitability. The diagram in the center illustrates the nuclear power lifecycle, which we explained in May as well. Leveraging IHI's strengths in both the front-end and the back-end areas, we will respond to the growing demands of the nuclear power market in Japan and overseas.
Currently, in response to the growing demand for nuclear power, our restart and fuel reprocessing businesses are performing steadily. After the completion of fuel reprocessing plants, we will provide support to ensure stable operations. In the medium to long term, we aim to achieve top-line growth by contributing to the construction of nuclear power plants by companies such as Westinghouse and NuScale through the supply of key equipment, such as reactor pressure vessels and primary containment vessels for next-generation advanced reactors in response to global nuclear power demand. To meet these domestic and international demands, we are actively enhancing our facilities and developing manufacturing technologies. By leveraging our technological strength, we aim to achieve a revenue target of JPY 100 billion ahead of schedule in the early 2030s.
In May, I mentioned by the end of 2030s, but I pushed the timing to be set earlier to achieving JPY 100 billion within the first half of 2030s.
Next, the future direction of the Social Infrastructure business. In this business area, we will focus on growth centered on bridges going forward. As shown in the diagrams below, we have built a strong track record over many years in both the new construction and maintenance markets. By leveraging our top-class construction capability for high-complexity projects, as demonstrated in the renovation of Daishi Bridge on the Metropolitan Expressway and the world-class engineering capabilities exemplified by Akashi Kaikyo Bridge, we will continue to demonstrate our competitive advantages in large-scale and complex construction and maintenance projects both in Japan and overseas. To be a company with overwhelming competitiveness handling concrete and steel bridges, maintenance and new construction, domestic and overseas, small to medium to large-scale projects within a single company, we integrated IIS, or IHI Infrastructure Systems, and IIK, or IHI Infrastructure Construction Service, on November the 1st.
In terms of market conditions, the demand for maintenance is increasing, especially in the domestic market of Japan due to the rapid increase of aging bridges and in overseas mature markets like Turkey. We see this market expansion as an opportunity and will work to enhance our profitability. On the future direction of bridges and water gates business, until this fiscal year, our top priority has been improving profit margins by narrowing down projects aiming to break away from low profitability. Going forward, we will leverage the expansion of the highly profitable bridge maintenance market to achieve an operating margin of over 10%, aiming to be a business that can generate stable cash flow. On the future direction of industrial systems and general-purpose machinery business, while we have been proceeding with business transfers for existing businesses, we have focused on products with high marginal profit and worked to strengthen LCBs.
As a result, our profitability and cash flow generation capabilities have been improving. We will continue to focus on key areas of parking, rotating machinery, heat treatment and surface engineering, and logistics and industrial system businesses, while expanding LCBs to ensure stable profit generation. Next, on the future direction of Vehicular Turbochargers business. As Ohshima mentioned earlier, we recognize that the business environment remains challenging, and as a result of thoroughly implementing structural reforms, including site closures, we expect to achieve a recovery in operating margin ahead of our initial forecast at the beginning of the year, as shown in the graph on the left. We will continue initiatives to enhance profitability, optimizing fixed costs, and work to establish a lean and resilient management structure that is less affected by external factors.
Regarding the future direction of Aero Engine, Space, and Defense business, Aero Engine, Space, and Defense business serves as the key growth driver for our group, and we aim to accelerate its expansion through proactive investments. As shown in the graph at the bottom, we have moved forward the target timing for achieving JPY 1 trillion in revenue, originally set for FY 2040 to early 2030s. To achieve the target, we will continue to prioritize the allocation of management resources to Civil Aero Engines, defense aero engines, and equipment businesses, ensuring the steady capture of strong demand. In addition, over the medium to long term, we aim to further expand space business, such as satellite constellations. Here, we show the future direction of civil aero engine business.
To achieve JPY 600 billion in revenue, which is 1.5x the current level by the 2030s, we will fundamentally reinforce our production and supply systems. To respond to the rapid increase in demand for maintenance and repair, we're constructing the new repair facility in Tsurugashima and securing human resources. We will continue to actively invest in expanding our maintenance and repair capabilities going forward. For critical materials with high dependence on overseas sources, we are strengthening domestic supply systems through collaboration with manufacturers and investments in group companies and other initiatives. Let me move on to our defense business, the other core pillar. By further contributing to the Japanese government's policy of fundamentally reinforcing defense capabilities, we will significantly expand our revenue. In the short to medium term, growth will be driven by solid rocket motors and unmanned assets businesses.
In the long term, the defense equipment and technology transfer business, in collaboration with the government, will drive growth. To achieve sustainable long-term business growth, we will strengthen our production and technological infrastructure and pursue expansions of new businesses, and lastly, we are currently formulating our next midterm plan, which will start from the next fiscal year. As you know, our previous plans have been designed on a three-year cycle. However, IHI Group's businesses spanning technology development, business development, and project execution require a longer-term perspective. From that standpoint, a three-year plan alone has not been sufficient to clearly convey our long-term direction, either internally or externally. While we will, of course, present three-year performance guidance, we also recognize the need to illustrate our five-year direction for technological development and investment to articulate our long-term business vision, financial targets, and corporate culture.
With this recognition, we aim to announce next management plans accordingly around May of next year. Myself and other executives have been actively engaging in dialogue with investors through IR activities and interviews. We view these exchanges as valuable opportunities to understand your views and expectations of IHI, and we intend to further strengthen this dialogue going forward, and we'd appreciate your continued support along the way. That concludes my presentation. Thank you.