Asahi Glass Reports Consolidated Interim Results for First Half Fiscal 2003

Net sales stood at ¥661.7 billion ($5,554 million), up 4.6%, year on year. Operating profit totaled ¥36.2 billion ($304 million), up 25.8%, and recurring profit reached ¥33.3 billion ($280 million), up 34.1%. The Company posted consolidated interim net income of ¥29.4 billion ($247 million), a substantial 93.5% improvement from the previous term. Asahi Glass will not pay an interim dividend for the current fiscal year, as it has decided to change its fiscal year-end from March 31 to December 31.

During the first half (ended on September 30) of the fiscal 2003, the world economy generally remained sluggish, with a slowdown in the U.S. and Europe economies. In Japan, stock prices recovered and corporate capital investment showed signs of a slight pickup. With consumer spending still weak, however, the Japanese economy failed to stage a full-scale recovery. Meanwhile, the economy in the rest of Asia, particularly China and Thailand, continued to grow strongly, albeit impacted somewhat by the outbreak of severe acute respiratory syndrome (SARS). The U.S. economy slowed with the war in Iraq, while the economy in Europe also stalled with the exception of certain countries such as Russia. Under these circumstances, Asahi Glass endeavored to expand the glass substrate business for thin film transistor liquid-crystal displays (TFT-LCDs), in response to rapidly growing demand. The Company also moved to withdraw from production of glass for cathode-ray tubes (CRTs) in North America. With these initiatives, the Company continued its efforts to restructure its management and cut costs in accordance with its Shrink to Grow program, thereby improving profitability.

As a result, the Company posted consolidated net sales for the first half of ¥661.7 billion, up 4.6%, or ¥28.8 billion, from a year earlier. Operating profit rose 25.8%, or ¥7.4 billion, to ¥36.2 billion, and recurring profit jumped 34.1%, or ¥8.5 billion, to ¥33.3 billion. Meanwhile, net income soared 93.5%,
or ¥14.2 billion, to ¥29.4 billion, thanks to an extraordinary profit earned from the sale of land and shares. From the fiscal year starting April 1, 2003, the Company decided to shift its fiscal year-end from March 31 to December 31. Accordingly, the current fiscal period will be the nine months from April 1, 2003 to December 31, 2003.