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Notice Concerning Transfer of Fixed Asset and Revision of Earnings Forecasts

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At its Board of Directors meeting today, Mitsubishi Heavy Industries, Ltd. (MHI) passed a resolution under which the company will transfer ownership of one of its fixed assets as described below. Revenue to accrue from the sale will be booked to both the parent and consolidated accounts in the fourth quarter of the current fiscal year ending March 31. In reflection of this event, the company has revised its full-year consolidated earnings forecasts announced on February 6.

    Reasons for the transfer

    MHI will transfer the fixed asset described below in order to make effective use of the company’s management resources and strengthen its financial position.

    Asset designated for transfer

    Description and location Revenue from transfer Current status
    Land: 329,993.74 m2
    8-1, Sachiura 1-chome, Kanazawa-ku, Yokohama
    Approx. ¥30 billion The Yokohama Dockyard & Machinery Works’ Kanazawa Plant has suspended operations
    • At the request of the transfer recipient, we refrain from disclosing the exact transfer price and book value. The revenue from the transfer indicated here is a rough estimate calculated by subtracting the asset’s book value and miscellaneous fees from the transfer price.

    Description of transfer recipient

    At the request of the transfer recipient, we refrain from disclosing the name of the transfer recipient. No relationships exist between the transfer recipient and MHI in terms of capital, human resources or business ties. Furthermore, the recipient is not an MHI affiliate.

    Transfer schedule

    Resolution at Board of Directors meeting February 26, 2019
    Contract signing February 28, 2019 (subject to change)
    Transfer date March 29, 2019 (subject to change)

    Outlook

    As a result of the transfer of the fixed asset cited, approximately ¥30 billion will be booked as revenue from the sale of fixed assets in the consolidated accounts of the fiscal year ending March 31, 2019.

    Revision of earnings forecasts

    In conjunction with the foregoing, MHI is revising its full-year earnings forecasts for FY2018 (April 1, 2018—March 31, 2019). No change is made to the full-term dividend projection.

      Revenue Profit from business activities Income before taxes Profit attributable to owners of parent Earnings per share Free cash flow
    Previous forecast (A)
    (February 6, 2019)
    ¥million
    4,200,000
    ¥million
    160,000
    ¥million
    170,000
    ¥million
    80,000
    ¥
    238.15
    ¥million
    100,000
    Revised forecast (B) 4,200,000 190,000 200,000 100,000 297.68 130,000
    Change (B-A) 0 30,000 30,000 20,000   30,000
    Change (%) 0.0 18.8 17.6 25.0   30.0
     (Reference) FY2017 results 4,085,679 58,176 39,232 △7,320 △21.79 167,559
    • As MHI Group adopted International Financial Reporting Standards (IFRS) starting from FY2018-1Q, the consolidated earnings forecasts indicated above are calculated based on IFRS. The FY2017 results shown in the table as a reference have been converted to IFRS-based figures.