• Mitsubishi Heavy Industries Group is an engineering company based in Japan. The company can be traced back to 1884. Initially it was Mitsubishi Shipbuilding Company then it was turned into Mitsubishi Heavy-Industries Ltd. in 1934.
  • The company belongs to specialty industrial machinery; it employs 77,430 full-time employees as of December 31, 2022.
  • The business of Mitsubishi Heavy Industries (MHI) can be divided into four segments - energy systems, plants & infrastructure systems, logistics, thermal & drive systems, and aircraft, defense & space.
  • During FY2022 ended March 31, 2023, Mitsubishi has reported revenue of ¥4,202.7 billion which was ¥3,860.2 billion a year earlier. Business profit of the company is ¥193.3 billion in FY22 as compared to ¥160.2 billion in FY21, an improvement of 21% year on year. Net income is ¥130.4 billion and ¥113.5 billion for the years, respectively. 

Brief Company Overview

mitsubishi logoMitsubishi Heavy Industries (TYO:7011) Group is an engineering company and one of the world's leading industrial groups that spans its operation from energy, logistics & infrastructure, industrial machinery, aerospace and defense, to automobiles. The company is listed in Tokyo Stock Exchange with the trading symbol "7011" and named Mitsubishi Heavy Industries, Ltd. The origin of the company can be traced back to 1884 when Yataro Iwasaki took a lease out on government-owned Nagasaki Shipyard and renamed it Nagasaki Shipyard & Machinery Works. He started shipbuilding business on a full scale. This shipbuilding business was later turned into Mitsubishi Shipbuilding Co., Ltd., and then launched as Mitsubishi Heavy-Industries, Ltd. in 1934, manufacturing ships, heavy machinery, airplanes, and railroad cars.1

Mitsubishi operates through Energy Systems; Plants & Infrastructure Systems; Logistics, Thermal & Drive Systems; and Aircraft, Defense & Space segments. The company belongs to specialty industrial machinery; it employs 77,430 full-time employees as of December 31, 2022. Mitsubishi is headquartered in 2-3, Marunouchi 3-chome, Chiyoda-ku, Tokyo, Japan. Seiji Izumisawa is the current President, CEO & Representative Director of the company. It has 8 domestic offices including the head office, 6 overseas offices in Turkey, Middle East, Taipei, Hanoi, Ho Chi Minh, and Kuala Lumpur. Consolidated total number of companies in the group is 260 - among them 68 are domestic and 192 are overseas. The company has 12 works and plants.2

mitsubishi headquarters

As of May, 2023, 52-week range of the company's share price has been between ¥5,687.00 to ¥4,340.00. Trailing P/E of the company is 13.28 times, price to sales (ttm) ratio is 0.42 times, profit margin is 3.13%, return on assets (ttm) is 1.63%, return on equity is 8.94%. Trailing annual dividend yield of the company is 1.05%, and payout ratio is 29.74%. The company split its share on September 27, 2017 to the ratio of 1 to 10.

Recent Developments

  • Japan’s Defense Ministry on April 14, 2023 announced that it has signed four contracts worth about 378.1 billion yen ($2.86 billion) with Mitsubishi Heavy Industries, to develop and mass-produce upgraded Type 12 surface-to-ship missiles (SSMs) and develop new submarine-launched standoff missiles.3
  • The company changed the name of Mitsubishi Aircraft Corporation to MSJ Asset Management effective from April 25, 2023.4
  • Mitsubishi Heavy Industries has decided in February 2023 to abandon more than a decade’s work on developing a short-haul commercial aircraft to focus on fighter jet production.5

Financial Highlights

Annual Performance Highlights

During FY2022 ended March 31, 2023, Mitsubishi has received orders of ¥4,501.3 billion as compared to ¥4,067.7 billion a year earlier. Orders increased YoY in Energy Systems and Logistics, Thermal & Drive Systems. In terms of major businesses, orders grew YoY in Gas Turbine Combined Cycle (GTCC), Aero Engines, Logistics Systems, and HVAC. Revenue reported during the periods are ¥4,202.7 billion and ¥3,860.2 billion, respectively. Revenue exceeded FY2021 levels in all segments and hit an all-time high. In terms of major businesses, both new installations and services grew in GTCC. Aero Engines turnover expanded due to the recovery in demand.
Revenue increased in Logistics Systems due to higher deliveries in the second half and service businesses expansion.  Business profit of the company is ¥193.3 billion in FY22 as compared to ¥160.2 billion in FY21, an improvement of 21% year on year. Despite downward pressure from materials and logistics cost inflation as well as one-time expenses associated with certain Japanese domestic and international projects, business profit increased by 21% YoY to ¥193.3 bn due to revenue increases, stronger services business, price optimization, and sales of fixed assets. Net income is ¥130.4 billion and ¥113.5 billion for the years, respectively. Return on equity (ROE) has increased by 0.2% YoY to 7.9%, dividend per share is ¥130, an increase of ¥30 per share YoY.

Of the total revenue of ¥4,202.7 billion, energy systems segment represents ¥1,738.6 billion or 41.37%; plant & infrastructure systems represents ¥675.6 billion 16.07%; logistics, thermal & drive systems represents ¥1,203.7 billion or 28.64%; aircraft, defense & space segment represents ¥619.4 billion or 14.74%; corporate & eliminations accounts for a -¥34.7 billion reduction in revenue.

Total assets increased by ¥358.4 billion from the end of FY2021 to ¥5,474.8 billion at the end of FY2022. This increase includes approximately ¥120 billion in currency translation effects related to foreign currency-denominated assets resulting from the depreciation of the yen compared to the end of FY2021, and a ¥33.4 billion increase in cash and cash equivalents. The equity ratio increased by 1 percentage point to 31.8%, and the debt-to-equity (D/E) ratio improved by 0.04 to 0.40.

Cash provided by operating activities of the company during the FY22 is ¥80.8 billion as compared to ¥285.5 billion a year earlier, cash flow used in FY22 is ¥45.5 billion and provided in FY21 is ¥16.3 billion, financing cash flow used for the periods are ¥18.9 billion and ¥255.7 billion, respectively.

Business Overview

The company offers thermal, renewable energy, nuclear power generation, and engine power plants; oil and gas production plants; lithium-ion battery products and fuel cells; civil aircrafts and engines, aviation equipment, and maintenance, repair, and overhaul of aircrafts; and launch vehicles and services, rocket engines, reaction control systems, space stations, rocket launchers, rocket engine combustion test facilities, and electronic parts.6 It also provides passenger and commercial ships, LNG and LPG carriers, special purpose vessels, and IT services and systems; marine machineries, boilers, turbines, engines, and structures; and intelligent transport systems products and solutions, such as electronic toll collection system, road user charging system, highway traffic management system, EV management system, and development system. In addition, the company offers organic solvent exhaust gas treatment system, waste-to-energy system, sludge treatment system, air quality control system, and bio-treatment system; turbochargers, car air-conditioning and refrigeration systems, rubber and tire machinery, and testing equipment; forklift trucks; and printing, paper converting, and metals, and food & packaging machinery, pumps, compressors & mechanical turbines, hydraulic components. Further, it provides gas holders, vibration control systems, water pipes, tunnel excavation machinery, and cybersecurity solutions for industrial control systems; special vehicles, naval ship and maritime systems, defense aircrafts, helicopters, defense aeroengines, and guided weapon systems; CO2 capture plants; and after-sales services.

mitsubishi products

The business of Mitsubishi Heavy Industries (MHI) can be divided into four segments - energy systems, plants & infrastructure systems, logistics, thermal & drive systems, and aircraft, defense & space.

Energy systems' main businesses are gas & steam power systems, nuclear power systems, compressors, aero engines, and marine machinery. Plant & infrastructure systems' main businesses are commercial ships, engineering, environmental systems, metals machinery, and machinery systems. Logistics, thermal & drive systems' main businesses are material handling systems, engines, turbochargers, HVAC systems, and automotive air conditioners. Aircraft, defense & space's main businesses are commercial aircraft, defense aircraft, missile systems, naval ships, special vehicles (tanks), maritime systems (torpedoes), and space systems.

Major parts of Mitsubishi Group7

The relationship between FORM MHI, MHI MTH, MHI and Mitsubishi Electric is such that all are part of the Mitsubishi Group. It is a corporate group of more than 600 companies, including Mitsubishi Motors, Nikon and MHI, covering a variety of commercial activities, from banking and insurance to mining and machinery. Mitsubishi Heavy Industries (MHI), with its 130 years of history, operates under Mitsubishi and is focused on efficient and clean energy, comfortable and safe living, clean environment, logistics and transportation.

Mitsubishi Heavy Industries Thermal Systems (MHI MTH) is a group company specialized in air conditioning to support domestic and international group companies. Mitsubishi Heavy Industries Thermal Systems design and manufacture of air conditioning for HVAC systems and automobiles within the MHI group.

After the successful cooperation of MHI and FORM in Turkey , FORM MHI Klima Sistemleri A.Ş. is a company established as a result of the Joint Venture agreement signed in Jan.30th, 2019.

Mitsubishi Electric, a former division of Mitsubishi Heavy industries, broke away in 1921 to embark on semiconductor technology. The two are direct competitors in the VRF and split product sectors although they have come to the air conditioning market on very different routes.

Company History

In 1884, Yataro Iwasaki, the founder of Mitsubishi, leased the Nagasaki Seitetsusho from the Japanese government, renamed it the Nagasaki Shipyard & Machinery Works and entered the shipbuilding business on a large scale. Iwasaki purchased the shipyards outright in 1887. In 1891, "Mitsubishi Heavy Industries - Yokohama Machinery Works" was started as Yokohama Dock Company, Ltd. Its main business was ship repairs, to which it added ship servicing by 1897.

Nagasaki Shipyard & Machinery Works was later turned into Mitsubishi Shipbuilding Co., Ltd., and then launched as Mitsubishi Heavy-Industries, Ltd. in 1934, manufacturing ships, heavy machinery, airplanes, and railroad cars. Following the World War II, the Japanese government took an initiative to dismantle large industrial groups (zaibatsu), MHI was divided into three independent and competing companies. Thus, in 1950, MHI was divided into three entities: West Japan Heavy-Industries, Ltd., Central Japan Heavy-Industries, Ltd. and East Japan Heavy-Industries, Ltd. The three companies later consolidated in 1964 and reborn as Mitsubishi Heavy Industries, Ltd.

mitsubishi history dockyard

In 1958, in cooperation with 23 other Mitsubishi Group corporations, Mitsubishi Heavy Industries created Mitsubishi Atomic Power Industries. MHI continues to dominate contemporary Japanese production of atomic power. The businesses in which the group entered during the period of depression in shipbuilding business due to the WWI, started flourishing now. During that time of crisis, Mitsubishi Shipbuilding Company (MSC) actively pursued a number of other technological developments, most notably the airplane and the automobile. Having made its first airplane in 1916 and first auto in the following year, MSC grouped these products under the name Mitsubishi Internal Combustion Engine Manufacturing Company in 1920. This offshoot went through several changes before taking the name of Mitsubishi Aircraft Company in 1928, at which time it was already one of Japan's leading manufacturers of military aircraft. After six years of independence, however, the aircraft and automobile facilities were once again united with MSC to form Mitsubishi Heavy Industries in 1934. In the early 1960s, Automobile production rose steadily, if not as quickly as at rivals Toyota and Nissan, and by 1964 the Nagoya plants were manufacturing 4,000 cars per month. Even aircraft production had been resumed by the early 1960s.8

In 1970, MHI's automobile department became independent and Mitsubishi Motors Corporation began manufacturing and marketing automobiles. The 1973 oil crisis marked the end of Japan's rapid economic growth and had a major impact on MHI's business, particularly in shipbuilding. After that point, the company established an industrial machinery business and enjoyed steady expansion until Japan again entered a period of slow growth following the bursting of its economic bubble. During that period, Mitsubishi succeeded in launching rockets and expanded its business domains to include aerospace.

The decade 1960-1970 saw increasing dependence of the world on imported oils. In the awake, Mitsubishi received an avalanche of orders for oil tankers. This ensued the effects like reunion of all three parts of Mitsubishi in 1964. Tanker-building business utilized the bulk of MHI's resources. A new dock with 300,000-gross-ton capacity was built at Nagasaki in 1965, followed by the 1972 completion of a mammoth 1-million-gross-ton supertanker facility at the same yard. This ultra-efficient dock enjoyed only a short life, however--the oil crisis of 1973 and 1974 soon brought tanker orders to a near standstill, permanently crippling the entire Japanese shipbuilding industry.

By 1975, as a result of that downturn, MHI generated only about 40% sales from the shipbuilding segment and only about 33% of its employees worked there. By 1985, the numbers further declined to only 15% and 17%, respectively. However, MHI managed to shift its assets quickly enough to survive. Having already spun off its automobile division to form Mitsubishi Motors Corporation in 1970, MHI aggressively pursued clients in the power-plant and factory-design fields. It also resumed its position as the top supplier of military hardware to Japan's growing defense force. MHI has streamlined its production facilities by shifting employees from older industries such as shipbuilding to newer ones such as machinery and power-plant production, at the same time allowing natural attrition to shrink its overall labor bill.

1954 mitsubishi history

MHI participated in a ¥540 billion emergency rescue of Mitsubishi Motors in January 2005, in partnership with Mitsubishi Corporation and Mitsubishi Tokyo Financial Group. As part of the rescue, MHI acquired ¥50 billion of Mitsubishi Motors stock, increasing its ownership stake to 15 percent and making the automaker an affiliate again.

In October 2009, MHI announced an order for up to 100 regional jets from the United States-based airline Trans States Holdings.

MHI entered merger talks with Hitachi in 2011 which later broke down and were suspended.9 This would have been the largest merger between two Japanese companies. However, the companies agreed to merge their thermal power generation businesses into a joint venture to be owned 65% by MHI and 35% by Hitachi.10 The joint venture started operation in February 2014 and ended in 2020 as Hitachi transferred its shares to MHI.

In February 2021, MHI sold its machine tools business MHI Machine Tool Co. to Nidec.11


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Tags: JP:7011 Japan
Created by Md. Touhidul Islam on 2023/05/06 02:28
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