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MHI's aviation unit swings to loss with higher MRJ costs

Mitsubishi Heavy Industries’ (MHI) aircraft, defense and space unit swung to an operating loss of Y15.1 billion ($138 million) in its 2017 financial year, attributed largely to the increase in research and development costs for its in-development MRJ regional jet.

Last year, it posted an operating income of Y900 million.

The unit saw net sales rise 2.8% to Y723 billion with more space systems and defense aircraft sold. In terms of commercial aircraft, it delivered 57 Boeing 777 shipsets, down from 91 in FY2016, although 787 shipsets delivered rose to 141 from 125 a year ago.

Orders received fell 32.5% to Y722 billion with drops for defense aircraft and missile systems.

MHI adds that the regional jet’s development costs are covered fully by internal capital.

The Japanese manufacturer forecasts a poorer performance for the unit in its 2018 financial year. It is expecting a Y15 billion operating loss, and for net sales to fall to Y700 billion, while orders received will slip further to Y650 billion.

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