MHI’s profit rises 25.6% on power plants

by Hiroko Nakata

Mitsubishi Heavy Industries Ltd. said Monday its group net profit for the business year that ended in March jumped by 25.6 percent to ¥61.3 billion, helped by orders to build overseas power plants amid globally rising energy demand.

The country’s largest heavy machinery maker said all of its business sectors logged operating profits for the first time since MHI began compiling consolidated earnings reports in 2000.

Group net sales rose by 4.4 percent to a record high ¥3.2 trillion, it said.

But its outlook for this business year ending next March is grim, mostly due to the yen’s surge against the dollar, rising raw material costs and costs for research and development of its new passenger jet, the Mitsubishi Regional Jet, that will be launched in 2013.

Mitsubishi Heavy expects a 12.0 percent drop in group net profit.

“We expect group operating profit to decline by a total of ¥64 billion because of the currency factor,” Hiroshi Kan, a Mitsubishi Heavy executive vice president, told a news conference.

The forecast is based on an exchange rate of ¥100 to the dollar and ¥150 to the euro. Last year, the dollar averaged ¥114.6 and the euro ¥159.3

Kan also said hikes in raw material costs would shave about ¥18 billion from its operating profit for the 2008 business year.