Difficult to Answer With a Standard Lead Time: Mitsubishi Heavy Industries' Q&A Summary for Q1 FY2025 on Gas Turbines

Mitsubishi Heavy Industries held a briefing on its results for the first quarter of its fiscal year 2025 on August 5, 2025, and its own document of the questions and answers is headed "Q&A Summary." It lists one speaker, the company's chief financial officer, and gives the questions without naming who asked them. Some of the questions were about gas turbines. Parts of the summary on them follow, not the whole, and the results themselves are not reported here.

Orders

One questioner began by saying that "Order intake in Energy Systems has been stronger than expected," and asked which business was responsible. "The primary contributor to this was the strong order intake in Gas Turbine Combined Cycle (GTCC), especially in North America," the answer begins. Further on it says "The trend in orders, particularly driven by strong electricity demand in the US, is indicative of a very favorable situation."

Another questioner noted that "Orders for eight large-frame gas turbines were booked in Q1 FY2025," and asked about production capacity. The company answered that it "booked orders for 25 units in FY2024" and is "expecting a similar level in FY2025." It has "started to increase production capacity, but this will not immediately be reflected in the number of units we book in FY2025."

Lead Time

Asked when the six large-frame gas turbine units it booked in the Americas will be delivered, the company answered that "Lead time varies by project, so it is difficult to answer with a standard lead time, such as one and a half years from order book." It books orders, it said, once contracts take effect, and "Many of the projects you asked about will be handed over to the customer and begin commercial operation between FY2028 and FY2030."

Lead time comes up in one more answer. Asked whether profitability would improve progressively toward FY2030, the company said that in GTCC "demand remains strong, and in response to this, we are working to shorten lead times and increase production capacity to meet that demand." The positive effects of those efforts, it said, "will likely become evident during the next medium-term business plan period."

The date that counts for a project is the one written into its own contract.

Production Capacity

Asked for a more quantitative overview of its GTCC capacity expansion, the company gave the expected increase as its plan, which "remains to increase production capacity by" 30% during the period of its 2024 medium-term business plan. Given recent strong demand for electricity, and its expectation that demand for gas turbines will increase even further, it has "begun studies on potentially accelerating our capacity expansion plans or further increasing capacity."

Asked whether there are any bottlenecks or supply risks in that expansion, the company said "We are increasing capacity across the board." It will strengthen its supply chain, increase production in terms of assembly and manufacturing capacity, and increase headcount as needed. It is also working to increase capacity in the US. The answer names no bottleneck.

For a project with a date to meet, what counts is where its own order already stands.

The summary's note on forward looking statements says that "Forecasts regarding future performance in these materials are based on judgments made in accordance with information available at the time this presentation was prepared," and that "these projections involve risks and uncertainties." It adds that "The results projected here should not be construed in any way as a guarantee by the Company."