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Sumitomo Chemical Reports Consolidated Financial Results for the Three Months Ended June 30, 2008.

Tokyo, July 31, 2008 - (JCN Newswire) - Sumitomo Chemical has reported consolidated financial results for the three months ended June 30, 2008. The Group posted sales of JPY 496.3 billion for the first quarter, an increase of JPY 57.1 billion over the same period the previous year. Operating income was JPY 24.7 billion and ordinary income was JPY 25.3 billion, both of which represent a decrease compared with the previous year. Net income was JPY 15.1 billion, about the same level as last year.

The Company's first-quarter financial performance by segment is as follows.

In the Basic Chemicals segment, sales of aluminum declined mainly because of lower selling prices due to a stronger yen, although overseas market prices were higher.

While market prices rose with an increase in feedstock prices, sales of caprolactam and other raw materials for synthetic fibers remained at the same level as the corresponding period the previous year because of the impact of the stronger yen. As a result, sales decreased by JPY 1.6 billion compared with the previous year to JPY 75.7 billion. Operating income decreased by JPY 2.7 billion to JPY 1.6 billion, affected by higher feedstock prices.

In the Petrochemicals & Plastics segment, sales of synthetic resins and petrochemical products such as propylene oxide increased because of the Company's selling price increases in Japan that reflected the rising prices for naphtha and other feedstocks, as well as higher market prices in Asia. As a result, sales increased by JPY 21.0 billion over the same period last year to JPY 164.8 billion. However, operating income decreased by JPY 3.0 billion to post a loss of JPY 0.7 billion because the impact of rising feedstock prices exceeded the effects of rising market prices for products.

In the Fine Chemicals segment, moderate growth in shipments of pharmaceutical intermediates and adhesives raw materials helped increase sales by JPY 1.2 billion over the same period last year to JPY 24.3 billion, while operating income declined by JPY 2.1 billion to JPY 1.3 billion because of the strong yen and rising feedstock prices.

In the IT-related Chemicals segment, sales of LCD display materials such as polarizing film and color filters increased substantially, supported by production capacity increases and productivity enhancements that were undertaken to meet the booming demand. As a result, sales rose by JPY 16.5 billion over the same period last year to JPY 77.8 billion. Operating income increased by JPY 11.3 billion to JPY 7.2 billion.

In the Agricultural Chemicals segment, sales of agricultural chemicals grew thanks to solid demand primarily in overseas markets. Sales of feed additives increased because of rising selling prices spurred by expanding global demand. Sales of Olyset Nets posted solid growth. As a result, sales increased by JPY 7.1 billion over the same period the previous year to JPY 54.2 billion. Operating income increased by JPY 0.4 billion to JPY 5.8 billion.

In the Pharmaceuticals segment, despite the Japanese government's revision of reimbursement prices for pharmaceuticals this year, sales of the segment's four main products, Amlodin (thereapeutic agent for hypertension and angina pectoris), Gasmotin (gastroprokinetic), Meropen (carbapenem antibiotic), and Prorenal (vasodilator) increased, driven by marketing efforts. Also, supported by sales of new products Lonasen (agent for the treatment of schizophrenia) and Avapro (agent for the treatment of hypertension), sales grew by JPY 4.5 billion over the same period last year to JPY 62.9 billion. Operating income decreased by JPY 2.9 billion to JPY 11.0 billion, primarily because of increased research and development expenses.

In the Others segment, the Company supplies electrical power and steam as well as providing services for chemical plant design, engineering and construction management, transport and warehousing, and materials and environmental analysis.

The Company also conducts development and sales activities in new business fields such as polymer organic light emitting diodes. Revenues from design, engineering and construction management services increased with progress on the Rabigh Project, the Company's joint project with Saudi Aramco for the establishment of an integrated refining and petrochemical complex in Rabigh, Saudi Arabia. As a result, sales rose by JPY 8.4 billion over the same period last year to JPY 36.6 billion. However, operating income declined by JPY 1.9 billion to post a loss of JPY 1.5 billion because of increased research and development expenses associated with new business development.
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 Q1 ended June 30, 2008 June 30, 2007
 Millions Yen US$ 1,000 Millions Yen
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Results of Operations
----------------------------------------------------------------------
Net Sales 496,349 4,664,058 439,222
Operating Income 24,656 231,686 25,634
Ordinary Income 25,337 238,085 34,438
Income Before Income Taxes and
 Minority Interests 26,858 252,377 34,685
Net Income 15,077 141,674 14,776
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Net income per 1,000 shares JPY 9,132 US$ 86 JPY 8,947
----------------------------------------------------------------------
 As of 6/30/2008 6/30/2007
 Yen US$ 1,000 Yen
----------------------------------------------------------------------
Financial Position
----------------------------------------------------------------------
Total Assets 2,311,494 21,720,485 2,358,929
Total Net Asset 968,607 9,101,738 1,006,046
Book Value per 1,000 shares JPY 443,568 US$ 4,168 JPY 465,213
----------------------------------------------------------------------
 Q1 ended June 30, 2008 June 30, 2007
 Millions Yen US$ 1,000 Millions Yen
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Cash Flows
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Cash flows from
 operating activities 6,325 59,434 19,073
 investing activities (38,030) (357,358) (62,526)
 financing activities 23,886 224,450 14,784
Cash and cash equivalents
 at end of period 98,434 924,958 97,811
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Results of Operations by Business Segment
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Net Sales
 Basic Chemicals 75,670 711,051 77,248
 Petrochemicals & Plastics 164,820 1,548,769 143,862
 Fine Chemicals 24,338 228,698 23,105
 IT-related Chemicals 77,827 731,319 61,299
 Agricultural Chemicals 54,233 509,613 47,166
 Pharmaceuticals 62,902 591,073 58,398
 Others 36,559 343,535 28,144
----------------------------------------------------------------------
 496,349 4,664,058 439,222
----------------------------------------------------------------------
Operating Income
 Basic Chemicals 1,589 14,931 4,291
 Petrochemicals & Plastics (711) (6,681) 2,317
 Fine Chemicals 1,253 11,774 3,354
 IT-related Chemicals 7,245 68,079 (4,069)
 Agricultural Chemicals 5,794 54,445 5,405
 Pharmaceuticals 11,019 103,543 13,940
 Others (1,487) (13,973) 419
 Elimination (46) (432) (23)
----------------------------------------------------------------------
 24,656 231,686 25,634
----------------------------------------------------------------------
(Note)
U.S. dollar amounts are translated from yen, for convenience only,
at the rate of JPY 106.42 = US$1 prevailing on June 30, 2008.


About Sumitomo Chemical

Sumitomo Chemical Co. Limited (TSE:4005) is one of Japan's leading chemical companies, offering a diverse range of products in the fields of basic chemicals, petrochemicals, fine chemicals, IT-related chemicals, agricultural chemicals, and pharmaceuticals. While expanding business worldwide and aggressively pursuing cutting-edge R&D, we continually strive to contribute to the sustainable development of society through our Responsible Care activities. For more informaion, please visit www.sumitomo-chem.co.jp.

Source: Sumitomo Chemical

Contact:
Sumitomo Chemical Co., Ltd.
Corporate Communications Dept.
Tel: +81-3-5543-5500
Fax: +81-3-5543-5901


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Publication:JCN Newswires
Article Type:Financial report
Date:Jul 31, 2008
Words:1191
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