Asahi Glass lowers estimate of FY 2006 group net profit by 46%.

TOKYO, Dec. 21 Kyodo

Asahi Glass Co. said Thursday it expects to see consolidated net profit of 41 billion yen for its fiscal year ending this month, down from 76 billion yen predicted as of Nov. 1.

The lower estimate is attributed to an additional 75 billion yen in extraordinary losses that stem from impairment losses in North America and elsewhere, and losses in sales of all of its shareholdings in Shanghai Asahi Electronic Glass Co. among major factors.

Still, the revised net profit figure is higher than the 60.01 billion yen in fiscal 2005.

The previous estimates of the fiscal 2006 group pretax profit and sales will remain unchanged at 130.0 billion yen and 1.6 trillion yen, respectively.

The profitability of the flat glass operations of Tennessee-based subsidiary AFG Industries Inc. has been eroded by higher raw materials and fuel costs as well as stiff competition in the market for construction-use glass sheet.

The resulting impairment loss on AFG's goodwill is estimated at 40 billion yen.

Asahi also forecasts impairment losses for some facilities making cathode-ray tube glass at about 18 billion yen due to weaker demand for their output.

The company has decided to sell off its shares in the Chinese group firm, deeming it necessary to improve profitability. This is estimated to result in a loss of some 10 billion yen.

The remaining 7.0 billion yen or so loss will arise from impairment losses on the fixed assets of AFG Industries and Asahi's chemicals operations.