The following is a summary of the Kawasaki Heavy Industries, Ltd. (KWHIY) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 2024 consolidated results highlighted the highest ever orders and revenue for a third quarter with significant upward revisions in full-year forecasts for pre-tax and net income.

• Notable performances in the Aerospace Systems and Aero Engine businesses led to a substantial increase in profits.

• Business profit for the quarter was dramatically influenced by recovery in certain sectors, notably the PW1100G engine segment and recovery in losses leading to a ¥79.0 billion business profit.

• Quarterly figures showed a significant increase in profit attributable to owners of parent to ¥44.1 billion, up ¥57.6 billion year-on-year.

Business Progress:

• Substantial recovery in the Aerospace Systems business from the previous losses in the PW1100G Engine business.

• Increased results in equity investments, particularly in the joint venture in China in ship and offshore structure.

• Recovery from defense orders and strong sales in the Aero Engine and Powersports & Engine businesses contributed to the year-on-year improvement.

• Engagement in numerous strategic projects, including entering the civil aircraft engine maintenance business and innovations in hydrogen utilization.

Opportunities:

• Kawasaki's upward revision of order forecasts due to an informal agreement on a subway car project in North America and increased defense orders.

• Expectation of strong future growth in the civil aircraft engine maintenance business, capitalizing on increasing passenger demand and the company's newly entered MRO (Maintenance, Repair, and Overhaul) services.

Risks:

• Sustained impact of Boeing strike affecting the Aerospace Systems business and force revisions in production for Boeing contractors.

• Weaker yen impacting foreign currency denominated refund liabilities and contributing to financial differences.

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