Hitachi Cable News vol.371
72nd cumulative second quarter business report
From April 1 to September 30, 2008

Note: Under the Financial Instruments and Exchange Law, Hitachi Cable has adopted a system of reporting results on a quarterly basis. As a result, the period traditionally known as the "interim fiscal period" is now known as the "cumulative second quarter."

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Message from the President and CEO

While the world's economy remained stagnant throughout the cumulative second quarter of this consolidated fiscal year (April 1 – September 30, 2008), the financial crisis that emerged in the United States at the end of this period led to various trends, including rapid declines in the price of internationally traded commodities such as crude oil and nonferrous metals and sustained and dramatic appreciation in the yen, creating economic turmoil.

Given these conditions, since this consolidated fiscal year marks the final year of the Plan “BEGIN” medium-term management plan (covering the fiscal years 2007 – 2009), the Hitachi Cable Group worked to put the finishing touches on achieving the goals of this plan, devoting itself to efforts including the start of Group membership for several new firms added to the Group through mergers and acquisitions (M&A) and efforts to enhance strengths in production technologies.

Hitachi Cable Group performance during the cumulative second quarter of this consolidated fiscal year showed total sales roughly equal to the same period of the previous fiscal year, at 281,038 million yen. However, Group income declined compared to the same period during the previous fiscal year, with operating income at 3,437 million yen, ordinary income at 4,285 million yen, and net income at 435 million yen. These declines were driven by factors such as declining demand and prices for products targeting semiconductor and automotive markets, increased depreciation due to revisions in the useful lives of machinery and equipment spurred by amendments in the Corporation Tax Law, and the effects of high crude-oil prices and the strong yen.

Hitachi Cable paid interim dividends of 4.25 yen per share, unchanged from initial forecasts. However, based on an overall assessment of factors such as the economic conditions facing the Group and revisions to forecasts of business performance, Hitachi Cable has unfortunately been forced to lower projections of year-end dividends, from 4.25 to 3.0 yen per share.

The Hitachi Cable Group intends to institute rapid improvements in its business structures by thoroughly examining and implementing efforts such as optimization of its production structures and putting surplus facilities to efficient use, focusing on activities that target the semiconductor and automotive markets, which are experiencing particularly sharp declines.

We thank you for your continued support of the Hitachi Cable Group.

December 2008

President and Chief Executive Officer,
Norio Sato