IHI Corporation posts 2020 losses

IHI Corporation, Japan’s biggest manufacturer of aero-engines for defence and commercial platforms, has reported significant declines in revenue and profit for fiscal year (FY) 2020–21.

The corporation said on 13 May that its yearly sales decreased 12% to JPY1.11 trillion (USD10 billion) and that its operating profit declined 42% to JPY27.9 billion. IHI attributed the falls to the Covid-19-related downturn in the production and supply of engines for commercial aircraft.

Accordingly, in 2020–21 the company’s Aero Engine, Space, and Defense business unit posted a 34% decline in revenue to JPY244.6 billion while its operating losses were JPY40.4 billion. Last year the unit made a profit of JPY20.8 billion. The unit’s orders dropped 19% to JPY260.4 billion.

In response to the declines, IHI said its Aero Engine, Space, and Defense unit would review its production structures and put more focus on aftermarket sales and services including maintenance, repair, and overhaul (MRO).

IHI Corporation is involved in most of Japan’s military aero-engine programmes including the production of components for the Pratt & Whitney F135 engine that powers the country’s Lockheed Martin F-35 fighter aircraft.

Looking forward, IHI has also identified opportunities to support Japan’s next-generation F-X fighter aircraft. The company is developing its XF9-1 engine for the platform, a prototype of which IHI delivered to the Japan Ministry of Defense for testing in June 2018. In 2019 IHI also disclosed plans to support the further development of the XF9-1 through international collaboration.

Other defence projects include IHI’s modification and upgrading of the F-7 engine that powers Kawasaki’s P-1 maritime patrol aircraft, and its work on the Pratt & Whitney F100 engines that power Japan’s locally produced Boeing F-15J/DJ Eagle fighter jets. IHI also supports the General Electric F110 engine that powers Japan’s Mitsubishi F-2 fighter.