I am Fukumoto from Finance and Accounting Division. The outline of the IHI Group fiscal year 2023 second quarter financial results were disclosed at 3 P.M. today. I will explain using the PowerPoint, and this slide shows the contents of what I'll be presenting. Page 4, please. This page gives the highlights of our financial results. FY23 second quarter IHI Group's financial results. As disclosed on October 25, the impact of the shipped PW1100G engine additional inspection plan and North American process plant litigation settlement have been posted as a one-time loss. Other than the PW1100G engines, Civil Aero Engine businesses are still growing thanks to the solid increase in aircraft demand.
As for the aftermarket costs this fiscal year, due to the increase, the profit is not growing as expected, but there is the steady increase of parts demand and sales. The material cost price increase has been reflected in various areas that we have added on to the sales price and strengthened our profitability and cost structure, and we hope to see the results further by the end of this fiscal year. Now, in regards to the cash flow, the Civil Aero Engine business, though we are continuing to see instability in the supply chain, we will secure the inventory for the sake of production increase. This will be given priority.
At the same time, we'll accelerate capital, working capital improvements to secure cash. The details are given on the next page. Page five, please. This gives the orders received and the income statement. The impact of PW1100G engine additional inspection program and North America process plant litigation settlement impacts have been posted as one-time loss. As a result of the orders received was JPY 480.2 billion, revenue JPY 470.3 billion, and operating profit of -JPY 157 billion. On the right-hand side, we give the impact amount of the special factors, plus the numbers excluding these special factors. Looking at the orders received excluding special factors, it is JPY 640 billion, and revenue is JPY 639 billion. Operating profit is JPY 16 billion.
As for the foreign exchange rate, as shown at the bottom, for this quarter, the average is a USD 140.62 to the yen , about a 9 yen depreciation from the same quarter last fiscal year. Please turn to page 6. On this page, we talk about the one-time loss that we have posted. The shipped PW1100G engines additional inspection program and IHI E&C North American process plant litigation settlement. We talk about the impact amount and the details. As for the details, it has already been explained on October 25 and remains unchanged. Please turn to page 7. This talks about the orders received and order backlog by segment. As a result of the litigation settlement, the impacts are seen in the Resources Energy Environment sector.
PW1100G engine additional inspection programs impact is seen in the Aero Engine, Space and Defense sector . They have led to a drop in the orders received for this quarter. As for the orders excluding special factors, it's given on the next page. On the right-hand side, for your reference, we give the backlog as of the end of September. This is not impacted by the special factor, and it has increased from the end of last fiscal year by JPY 21.6 billion, totaling JPY 1,321.1 billion. Next page, we give as reference the orders received breakdown excluding special factors.
Company-wide, the orders received was the same as the same quarter last year, but we see that for the Resources, Energy and Environment , because last fiscal year there was the larger Southeast Asia gas-fired power plant construction, this has impacted us in this fiscal, plus the absence of nuclear power restart deals. As a result, we see a drop in JPY 34.5 billion. Meanwhile, the Aero Engine, Defense business has seen an increase in orders totaling JPY 29.5 billion. And next, page 9. This talks about the revenue and operating profit by segment. The reference is given, excluding special factors on the next page. So I'll explain these on the next page. Please turn to page 10.
This gives the revenue and operating profit by segment, excluding the special factors. First, our revenue. In the Social Infrastructure it is slightly below the same quarter last fiscal year. In other sectors, we're seeing a steady increase in revenue. But meanwhile, the operating profit, regretfully, in all reportable segments, there it is a drop. And in Social Infrastructure , we're continuing seeing operating deficit.
As for the analysis of change in operating profit, that will be given on this next page. So let me just talk about the changes in revenue, beginning with revenue, energy, and environment. There was a drop in the nuclear power plant construction volume, but in Southeast Asia, there was a progress in the large-scale power plant construction and increase in carbon solution lifecycle business. As a result, revenue has increased.
Industrial Systems, General Machinery, this is driven by the Vehicular Turbochargers. Aero engine, space, defense revenue increase, this is driven by Civil Aero Engine PW1100G and other main engine units increase. Please take a look at page 11. This is the analysis of change in operating profit according to segment. PW1100G, the effect from that and also the effect from the settlement of litigation, is treated as separate items. The impact of the revenue changes, and because of the decline in the project for the nuclear power and also the Civil Aero Engine, since in the early stage of the mass production, about the main engine units and the aftermarket related charges. So as a whole, -JPY 12.2 billion . Effect from construction profitability was -JPY 1.6 billion .
Bridges and water gate, so the recording of the necessary cost in advance had an effect, and this is still continuing, and we try to recover towards the year-end. The change in foreign exchange is resulting in JPY 5.6 billion profit, centering on Civil Aero Engine. Change in SG&A, due to R&D and labor cost increase, resulted in JPY 8.2 billion decrease. As for the other changes, is due to the backlash for the recorded in the same period of last year. On the next page is an explanation about the financial profit and loss. As for the Civil Aero Engine and the Vehicular Turbochargers, please take a look at the reference. Take a look at page 12. This is about the breakdown of the financial profit and loss.
As stated, the foreign exchange had fluctuated from the beginning to the year-end, so the decline in the profit is JPY 7.6 billion. Because the yen depreciation fluctuation was smaller, so the profit from foreign exchange is smaller . Equity method investment loss is JPY 1.7 billion in surplus, because Japan Marine United has improved from deficit to surplus. Take a look at page 13, and this is the consolidated financial statements. Total assets is JPY 111.3 billion increase and became JPY 2,053.3 billion. This is due to the Civil Aero Engine. The supply chain is very unstable, so that we needed to have securing of the parts, and the inventory has increased.
The refund liabilities, about in the middle of the table, is impacted by the PW1100G engine additional inspection program. Then the outstanding interest-bearing debt, which is right below that, due to the increase in working capital, centering on short-term funding, became JPY 644.7 billion. The capital decreased by JPY 130.5 billion to JPY 325.7 billion. The debt-to-equity ratio resulted in 1.98 times, and the ratio of equity attributable to owners of parent became 14.5%. So, about one-time recording, this has impairment of the capital and also very much deterioration of the financial indices. As our guideline, we want to have it recover to fiscal 2022 financial foundation, and we would like to have the cash and the profit.
And also, we would like to see the improvement by taking the planned measures. Next, page 14, and this is a consolidated cash flow statement. The operating cash flow resulted in JPY 81.4 billion in excess because of the spending of the inventory for the Civil Aero Engine, and this is the result of the working capital increase as well. The PW1100G engine, the additional inspection program, that the impact on the cash, and that we will need to have the cash conversion cycle optimized to have the cash production, so that we would be improving the working capital. Investment cash flow is JPY 31.3 billion , and free cash flow is -JPY 112.8 billion.
On page 15, we show the R&D and the capital expenditure and depreciation and the revenue according to regional breakdown. Next, I turn to forecast of the consolidated results of fiscal year 2023. Please take a look at page 17. The forecast, including the segment breakdown, has not changed from the disclosed on October 25. So PW1100G engine, additional inspection program effect, and the North American process plant litigation settlement, those has been taken into account. We had disclosed on August 8, and that has been recorded in the prior forecast. The sensitivity of the foreign exchange is for 1 yen for the remaining six months, is JPY 700 million. The dividend payout we had set at interim payment JPY 50, including that, to JPY 100 per share.
So, we skip the pages 18 to 20, and last, we take a look at page 21. As for the forecast of cash flow, we have not changed from the numbers disclosed on October 25. PW1100G engine additional inspection program, the impact on the cash flow is going to remain for the remaining several years to come. So the Group Management Policies 2023, the growth story, explaining that we like to prioritize investment and also to improve the working capital.
And as for the securing of the financial stability, we want to have the capital acquisition in a speedy manner, and we would need to improve the impaired capital and the D/E ratio, so that we can plan the measures and to have the financial discipline recovered. And as for the slides after this, take a look at it afterwards, please. As such, I conclude my explanation. Thank you. Next, our President Ide will talk about the management review.
Yes, allow me to present the management review. Well, this time we had to make a downward revision of our financial results, and fact that we have posted this large special one-time loss we are taking this seriously and trying to address the situation with an all-out effort. Now, as for the explanation today, I will talk about the impact of additional PW1100G inspection program, Group Management Policies 2023 initiatives, and resource allocations and management objectives. These are the three points I'll be covering. Now, first about the PW1100G inspection program. Well, we have already explained about this , and well, I think I'll be repeating what has already been explained before.
But allow me, from my side, to once again present to you what has happened. So I might be repeating what you might already heard, but please excuse me. At first, in regards to issue from 2015 to 2021, in the process of the powder metallurgy metals production, and there were rare cases in which the powder found its way into the product. And we had a study by Pratt & Whitney, and it was concluded that a repeated inspection will be done, and also the service life will be shortened. And as a result, we are expecting that the maintenance frequency will be increasing significantly.
Now, as for the manufacturing process, so effective measures have already been taken, and therefore, we have not seen the same problem occurring since then. So, having said that, in this case, regards to this case, we think that it is a one-time event, and we will try to look into the additional maintenance and also the additional warranty to our customers, so totally JPY 70 billion. And including future maintenance, we will be sharing and posting as one-time loss, 15% share, the share of our partnership. Now, we have posted this large loss, but above all, together with our program partners, we have to boost our maintenance capacity and also try to alleviate the impact as much as possible.
We will do our best to do so. In regards to the maintenance capacity, IHI also will make an all-out group effort to try to meet this requirement. Now, this case, as I said earlier, it is a one-time event and will not be posting any additional losses next fiscal year. But we are not being optimistic about this. We want to work closer with our partner. We recognize the importance of this partnership, and we'll introduce various measures to assure that nothing like this will happen. Now, having learned from this experience, IHI in our midterm management plan is still positioning the aero engine business as a growth business. But, though very rarely happening in the production process, there are such risks, as we've just seen this time.
Therefore, we have to try to ensure and strengthen our endurance, with, against such things, so as to improve the profitability of our engine and to improve our production process for aero engines. Now, about the future prospects of aero engines on the next slide, it talks about this. But, yes, I'm going forward, and we're expecting a 3% or so annual increase in growth. And, aside from the PW1100G, we think that, the measures to increase production will be key. Productivity increase is a must. As you know, IHI is involved in development and mass production of small to super large engines. The first generation engines listed here are in the investment recovery phase, and the second generation engines, including the PW1100G, is in its mass production investment phase.
PW1100G and others, in the narrow body market, they account for 70% of all aircraft. It is a volume zone. The PW1100G engine is highly appraised for its performance, such as fuel economy. Following this case, the assessment of the PW1100G, it may change, but in the long run, we believe it is an engine that can gain share, and we also have expectations for the spare parts business. Now, from here, I would like to talk about each of the business segments and give you the outline of each of our business. PW1100G, excluding this special factor, we still think that IHI businesses will grow and are growing.
This is something that I want you all to understand, and I will try to explain that, I'm taking time here. So I will explain by business segment, though briefly. As I've already said, the PW1100G, this increased inspection, plus the aero engine, we think that there will be a growing demand, and therefore, it is necessary for us to ensure that we can increase our production and have the facilities in place to do so. And as I said, IHI Group, on the whole, will make all our effort to try to shift our resources more towards the aero engine business. And we will also work to automate and accelerate DX, digital transformation. We believe that these factors will be key.
Also, about the defense budget, the increase in defense budget is something positive for us. We will prepare for the production increase, that's first. But right now, when it comes to defense engine, we are seeing increase in spare parts and also missile. We have the fixed solid rocket motor , and we believe that these will see an increase in demand. But whether it'll contribute significantly to our financial results, it will be after fiscal year 2026, after our current midterm management plan. And so keeping that in mind, we, at this point in time, would take whatever measures need to be taken. And that was the aero engine, space, and defense. Next, I talk about the resources, energy, and environment.
And in this segment, as you have been much concerned about the large plant, especially the coal-fired plants, so that this is the last unit in Bangladesh and Vietnam, very large projects, but this is towards the end of the life of the power plant. And both of those are being operating smoothly and having a profit. So in that sense, as you have been very concerned about the downside risk of the big project, I think that the concern is no longer there. And as Mr. Fukumoto had explained, at Singapore, we have the Jurong Engineering and gas turbine project, and a very large scale order we have been receiving from Singapore.
About the gas turbine power generation, I think that is going to be the area where growth is going to come. So in that sense, we would want to have the profitability in this area and continue our efforts forward in this area. The next pillar is going to come from the life cycle business, so the services, and especially the fuel conversion and the services there. The project is going to be quite increasing.
As for this, we are going to have the enlargement as the pillar business, and we want to continue to expand in this area. The third one is about the nuclear energy. As for the restart following earthquake reinforcement measures in place, we are working with Onagawa and Kashiwazaki-Kariwa, and we are planning for the restart. As for Fukushima Daiichi Nuclear Power Plant, to have the decommissioning of that, we are discussing with TEPCO.
So as for the restart and decommissioning, we are planning towards the future as IHI. And as for SMR, small modular reactor, in the 2020s latter part, in United States, in Romania, the project has been working, and we want to securely improve this. And the traditional type, Westinghouse AP1000. So those types of reactors, various projects are now moving. As for IHI strength, the nuclear reactor containment we have in United States and overseas, a track record, and this is going to be after 2025, but we want to have the business expansion and make preparation for that. Next is about the Social Infrastructure , and overseas, we have the large-scale bridge, Romania, Bangladesh, India, and other overseas location. And this is quite progressing well and towards the end of the construction.
Because of the cost increase, its profitability is squeezed, but we are having the escalation clause there with the customers so that the profitability is coming up, coming back. Asia, Africa, we want to have the ODA, or in the Europe and the United States, to have the maintenance projects, undertaking maintenance projects and also new projects. Continue to have the large-scale bridge construction that IHI is good at. Here, for the maintenance projects, including the Daishi Bridge replacement in Kawasaki and the Second Bosphorus Bridge in Turkey, we are continuing with the rehabilitation project and expanding the bridge management support system projects.
Next is about the Industrial Systems and General-Purpose Machinery , and this is about the vehicle turbochargers has been steadily recovering. The unit production of vehicle turbochargers has steadily recovered, but we cannot be overly optimistic about it. Now we are having the new orders from the large orders, but this is continue to lose or to decrease in the mid to the long term. In the Western countries, such as Europe and United States, we want to have a plan in place to strengthen our competitiveness. As for the heat treatment and surface engineering businesses, we are having a good position here in this area.
Automobiles were the first ones, but we are having the medical and also other areas such as semiconductors. This is a growth area. The compressor, so the industrial compressor, is growing well, and in domestic markets, a little bit pressed, but the semiconductors, large scales and also the carbon neutral EV-related investments and the new investments, we are having more of those, so that we want to be positive in these areas. About the ammonia, hydrogen, and other gases, so the process gas compressor business, there is going to be more expansion in this than expected, so we want to put more focus in this area.
So last area is about the IHI Midterm Plan, 2023 initiative, which we had set as the growth business and the focus area for the investment. And the PW plan has affected us, but there has been no change about this 2023 initiative for the resource allocation. But having said that, the investment priority, we would like to have a close relook, and also for the cost reduction, we want to have a company-wide effort for this.
And to have the securement of the capital, we are going to think about selling of the fixed assets. We had a big loss this time around, but this is just a one-time loss, and it's not impacting our growth trend, so that we have not changed our investment and management objective, and we are going to have a steady distribution of dividends to our stockholders. So as I have said at the outset, although we have a very big loss that had hit us, but we want to have the recovery from that, it's a company-wide effort. So as such, I'd like to finish my explanation. Thank you for listening.