Asahi Kasei Reports Consolidated Third Quarter Results; Net Sales Rise 8.8%, Net Profit Rises 22%

JCN Newswires, Feb 1, 2007

Tokyo, Japan, Feb 1, 2007 - (JCN Newswire) - Asahi Kasei (TSE: 3407; ADR: AHKSY) has announced consolidated results for the third quarter ending December 31, 2006. Consolidated net sales grew by JPY 96.3 billion from a year ago to JPY 1,187.1 billion, an 8.8% increase. Sales growth was greatest in chemicals operations, with product prices rising to compensate for increased feedstock costs. Operating profit grew by JPY 12.6 billion to JPY 94.2 billion, a 15.4% increase. Ordinary profit grew by JPY 12.7 billion to JPY 93.5 billion, a 15.8% increase. Net income grew by JPY 10.3 billion to JPY 56.9 billion, a 22.0% increase.

I. Summary of Consolidated Results

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1. Operating results (% change from previous year in brackets)

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                            Q1 - Q3 2006           Q1 - Q3 2005

Net sales               1,187,059  [ 8.8%]     1,090,749 [ 7.8%]
Operating profit           94,187 [ 15.4%]        81,630 [−8.9%]
Ordinary profit            93,528 [ 15.8%]        80,785 [−8.5%]
Net income                 56,851 [ 22.0%]        46,581 [−0.3%]
Net income per share(y)       40.62                  33.25
Diluted net income
   per share(y)                  -                      -

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2. Financial position

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At end of                    Dec. 2006              Dec. 2005

Total assets                 1,485,102              1,412,554
Net assets                     644,113                574,098
Net worth/total assets           42.9%                  40.6%
Net worth per share(y)          454.88                 410.09

Note: Net assets at end of December 2005 does not include minority
interests. Net worth at end of December 2005 is the same as
shareholders' equity. Net worth at end of December 2006 comprises
shareholders' equity and valuation, translation adjustment & others.

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3. Cash flows

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Nine months ended December        2006                   2005

Cash flows from
  operating activities          70,306                 37,198
Cash flows from
  investing activities         (69,601)               (41,466)
Cash flows from
  financing activities          (4,207)                12,148
Cash and cash equivalents
  at end of period              85,417                 76,712

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II. Results by Operating Segment

Chemicals

Sales for the segment grew by JPY 66.1 billion to JPY 556.2 billion, a 13.5% increase. Operating profit grew by JPY 2.6 billion to JPY 37.0 billion, a 7.6% increase. Sales and operating profit in volume products, comprising chemicals/derivative products and polymer products, increased. Higher feedstock costs were overcome by product price increases and by increased profitability in the nylon-related operations of adipic acid and Leona(TM) nylon 66 resin and filament.

Sales and operating profit in specialty products grew with increased shipments of Hipore(TM) Li-ion rechargeable battery membrane separators, export of membrane-process chlor-alkali electrolyzers to China, and increased shipments of ion-exchange membranes for chlor-alkali.

Homes

Sales for the segment grew by JPY 0.1 billion to JPY 275.7 billion, a 0.1% increase. Operating profit decreased by JPY 0.1 billion to JPY 14.3 billion, a 0.7% decline. New orders worth JPY 222.0 billion were received during the period for order-built homes, JPY 4.2 billion less than a year ago.

Sales increased slightly, with growth in housing-related operations such as remodeling and real estate offsetting a sales decrease from fewer deliveries of order-built unit homes. Operating profit decreased slightly, as profit growth from large condominium construction projects and in housing-related operations such as remodeling and real estate was insufficient to overcome the effect of fewer deliveries of order-built unit homes.

Pharma

Sales for the segment decreased by JPY 0.1 billion to JPY 80.9 billion, a 0.2% decline. Operating profit grew by JPY 4.4 billion to JPY 14.4 billion, a 43.8% increase. Sales decreased with reimbursement price cuts throughout pharmaceutical and medical device operations. Operating profit grew with increased shipments of Flivas(TM) therapy for benign prostatic hyperplasia and APS(TM) polysulfone-membrane artificial kidneys, and with licensing income.

Fibers

Sales for the segment grew by JPY 12.1 billion to JPY 77.6 billion, an 18.5% increase. Operating profit decreased by JPY 0.4 billion to JPY 2.7 billion, a 13.1% decline. Sales grew with product price increases to offset elevated feedstock costs, increased shipments of Roica(TM) elastic polyurethane filament and Bemberg(TM) cupro fiber, and favorable exchange rates. Operating profit decreased with the effect of a tornado in September in Nobeoka, Miyazaki, and with the Dorlastan(TM) elastic polyurethane filament business acquired from Lanxess operating at a loss.