Hitachi Cable News vol.369
71st semiannual business report   From April 1, to September 30, 2007

Special Report

Summary of interim settlement of accounts for the 2008 fiscal year

Overview of business performance

Due to factors such as rising prices for copper, the primary raw material used in products such as wires, cables, and copper products, sales in this interim consolidated fiscal period increased by 10% over the previous interim consolidated fiscal period to 277,468 million yen. In terms of income, due to factors such as increased sales and results of efforts to reduce costs, operating income increased by 10% from the previous interim consolidated fiscal period to 10,938 million yen, while ordinary income increased by 18% from the previous interim consolidated fiscal period to 11,366 million yen. The Company recorded net income of 6,840 million yen for this interim consolidated fiscal period, an increase of 53% over the previous interim consolidated fiscal period.

* Figures have been rounded to the nearest whole unit

Looking at conditions by business segment, in the wires and cables business we see stable sales of industrial and power cables, as well as booming sales of magnet wires for electronic automotive components and heavy electrical machinery. Overall sales in this segment totaled 145,943 million yen, an increase of 12% over the figure for the previous interim consolidated fiscal period. Operating income in this segment totaled 5,492 million yen, reflecting an increase of 12% over the figure for the previous interim consolidated fiscal period.

In the information and telecommunications networking segment, performance in the optical submarine cables business grew significantly due to the start of numerous large-scale projects resulting from rapid growth in demand for communication lines around the world. Performance in the area of wireless systems sales for use in mobile phone base stations was also strong, and information networks, sales to telecommunications carriers recovered at the end of the interim fiscal period. As a whole we see sales growth in this segment 19% above the previous interim consolidated fiscal period to 40,585 million yen. Operating income in this segment totaled 2,477 million yen, an increase of 84% from the previous interim consolidated fiscal period.

In the sophisticated materials segment, the withdrawal of an overseas subsidiary from the vinyl-insulated wires for automobile business led to declines in performance figures for the auto parts. However, TAB tape sales for use in large LCD panels increased, as did sales of copper products. Sales of compound semiconductors were largely unchanged from the previous interim consolidated fiscal period. As a result, overall sales in this segment totaled 103,251 million yen, an increase of 7% over the figure from the previous interim consolidated fiscal period. Operating income was 2,764 million yen, a decrease of 18% from the previous interim consolidated fiscal period.

* Graphs of sales by business segment are based on figures after removing internal sales or transfers between business segments.