Hello everyone. I am Katsuya Nakanishi, President and CEO. Thank you very much for taking the time to attend Mitsubishi Corporation's Fiscal 25 Q2 earnings presentation. First, I will explain the highlights of our Fiscal 25 second quarter results and the main progress under Corporate Strategy 2027. Please refer to Page 3 at the bottom right of the presentation materials. First, regarding our results, underlying operating cash flow for Fiscal 25 Q2 was JPY 446.3 billion, and consolidated net income was JPY 355.8 billion. Both are progressing at around 50% toward our full year forecast. While there are differences across segments, overall performance is largely in line with plan.
Taking into account macroeconomic trends and the external environment, we are revising the forecast by each segment while we maintain our overall full year forecast of JPY 900 billion in underlying operating cash flow and JPY 700 billion in consolidated net income set at the beginning of the fiscal year. Next, regarding progress under Corporate Strategy 2027, we have continued to advance initiatives under our Value Creation Framework, Enhance, Reshape, and Create, and have announced several new projects since the previous quarter. For example, in our copper business, as a Reshape initiative, we reached a definitive agreement for a joint mine plan with the adjacent copper mines in Chile. Under Create, we agreed to acquire shares in a copper mining project in North America, with which we conducted a press release the other day.
Through these initiatives, our equity copper production is expected to increase by 42,000 metric tons on average from around fiscal year 2030. In addition to these announced initiatives, under Enhance, we are steadily promoting efforts to strengthen the earnings base across all 244 businesses. For example, LNG Canada is progressing smoothly, aiming to begin production at Train 2 in November, following May this year. Other initiatives announced through the second quarter, as well as the main actions and progress of each business under Enhance, are detailed on Pages 10 and 11 in the materials. We will continue to advance our value creation mechanism, powered by our comprehensive strengths, pursuing both enhancement and expansion of existing businesses and new investments. Under Corporate Strategy 2027, we aim to achieve an average underlying operating cash flow growth rate of over 10% and ROE of over 12% by fiscal year 2027.
That concludes my remarks. Next, our CFO, Mr. Yuzo Nouchi, will explain the financial overview.
I'm Yuzo Nouchi, CFO of the company. I'll provide several additional comments on our financial results. Please turn to Page 4. Underlying operating cash flow for the second quarter was JPY 446.3 billion, down JPY 81 billion year-on-year, and consolidated net income was JPY 355.8 billion, down JPY 262.3 billion year-on-year. The decline in underlying operating cash flow was mainly due to worsening market conditions in the Australian steelmaking coal business and the reclassification of Lawson as an equity method affiliate. Consolidated net income decreased year-on-year, reflecting the absence of the previous fiscal year's major capital recycling gains, such as the gain on sale of steelmaking coal mines in Australia and the revaluation gain associated with Lawson's reclassification to an equity method affiliate.
Regarding the full year forecast, as President Katsuya Nakanishi mentioned earlier, after reviewing each segment, we will maintain our full year forecast of JPY 900 billion in underlying operating cash flow and JPY 700 billion in consolidated net income. Despite changes in the market and business environment, both indicators are progressing smoothly, with about 50% achievement against the full year forecast. Our share buyback program, announced on April the 3rd with an upper limit of JPY 1 trillion, is also progressing steadily, with total purchases amounting to JPY 578.2 billion as of the end of September. Please now turn to Page 5. I'll now explain progress in cash flow allocation and leverage as of the second quarter under Corporate Strategy 2027. Compared to our cash flow allocation plan, cash gains consisted of JPY 446.3 billion in underlying operating cash flow and JPY 251.3 billion through divestitures.
On the cash-out side, in addition to payment for re-entry into the Malaysia LNG Dua project in Q1, in Q2, we executed a tender offer for Mitsubishi Shokuhin as a Reshape initiative and acquired a stake in GCash, a digital financial business in the Philippines as a create initiative, with total cash outflows reaching JPY 593.6 billion, including the ongoing share buyback with an upper limit of JPY 1 trillion. Total shareholder returns for fiscal 2025 are expected to reach JPY 1.5 trillion. As of the end of fiscal 2025 Q2, our Net DER, an indicator of financial soundness, stood at 0.39x , well below our upper target of 0.6x , indicating sufficient capacity for additional funding. Overall, progress in cash flow allocation remains on track. Leveraging our strong financial position, we will continue to allocate resources proactively to Enhance, Reshape, and Create, advancing our value creation framework.
Next, please refer to Page 6 and beyond for segment details. First, I'll explain the segments with large year-on-year changes regarding underlying cash flow, underlying operating cash flow on a year-over-year basis. In Environmental Energy at the top, although initial costs were incurred ahead of production start at LNG Canada, as dividends in the LNG Asia-Pacific business were recognized in the first half, profits increased. There, from the top, in Mineral Resources. Profits declined mainly due to worsening market conditions and lower dividends from the iron ore business. Underneath, in Urban Development and Infrastructure, the decline in profit was due to lower dividends from North American real estate development and reduced equity income from the commercial vessels-related business. Please turn to Page 7 for consolidated net income.
Compared with underlying operating cash flow, the decline in consolidated net income was greater, reflecting the absence of one-off gains recorded in fiscal 2024, such as the coal mine sales and Mineral Resources and the Lawson revaluation gain in the SLC segment. Next, please refer to Page 8 for forecast by segment. Like explained earlier, we have maintained our full year forecast of JPY 900 billion in underlying operating cash flow but made several segment-level revisions. First, at the very top for Environmental Energy, we revised our forecast upward by JPY 14 billion to JPY 167 billion, reflecting the impact of upstream reorganization in the North American LNG business. For Material Solution, we revised our forecast downward by JPY 12 billion to JPY 79 billion due to sluggish steel products transactions and weaker marketing conditions in the basic chemicals business.
At the very bottom for Power Solution, we revised our forecast upward by JPY 11 billion to JPY 104 billion, driven by favorable forex impact in the European integrated energy business and stronger trading income in the U.S. power business. Finally, please turn to Page 9 for the consolidated net income forecast. We have maintained our full year consolidated net income forecast of JPY 700 billion with segment-level revisions. In light of changes in the business environment, like underlying operating cash flow, Materials Solution, Mineral Resources, and Mobility were revised downward, while Urban Development and Infrastructure, SLC, and Power Solution were revised upward. The market assumptions used for these forecasts are detailed on Page 46 of the materials. Please refer to it later. That concludes my presentation.