Asahi Kasei Corporation
Head Office: 1-2-6 Dojimahama, Kita-ku, Osaka, JapanTokyo Head Office: 1-1-2 Yurakucho, Chiyoda-ku, Tokyo, Japan
Security code: 3407
Contact: Corporate Communications, Phone +81-3-3507-2060, Fax +81-3-3507-2495
July 27, 2006

Consolidated Results for 1st Quarter Fiscal 2006:
April 1, 2006 – June 30, 2006

(Unaudited; all figures in millions of yen, rounded to the nearest million, unless otherwise specified)

I. Conditions for Preparation of Quarterly Statements
1. Change in method of accounting: None
2. Change in scope of consolidation, application of equity method
Increase in No. of consolidated subsidiaries:

4.

Decrease in No. of equity method companies:

1.

II. Summary of Consolidated Results
1. Operating results (percent change from previous year in brackets)
Net sales
Operating profit
Ordinary profit
Net income
Net income per share*
Diluted net income per share*

Q1 2006
348,483 [+6.0%]
15,297 [+12.4%]
15,064 [+3.2%]
9,184 [+76.8%]
6.56—

Q1 2005
328,625 [+11.5%]
13,612 [−25.2%]
14,601 [−23.9%]
5,195 [−56.7%]
3.71
—
* Yen

2. Financial position

Total assets
Net assets
Net worth/total assets
Net worth per share*At end ofAt end ofJune 2006 June 2005
1,409,705 1,275,636
601,712511,55142.2%
40.1%
424.88365.32* Yen

Note: Net assets at end of June 2005 does not include minority interests. Net worth
at end of June 2005 is the same as shareholders’ equity. Net worth at end of June 2006
comprises shareholders’ equity and valuation, transition adjustment and others.

Asahi Kasei
Consolidated Results

July 27, 2006
p. 1/6

3. Cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at end of period

Q1 2006(11,554)(15,519)
7,739
69,395

Q1 2005(14,653)(10,331)5,279
48,865

III. Forecast for Fiscal 2006 (April 1, 2006 – March 31, 2007)
First half*
Full year†
Net sales
767,000
1,603,000
Ordinary profit
41,500107,000
Net income
24,00062,000* The net sales forecast for the first half of fiscal 2006
announced on May 9, 2006 has been revised.
† Net income per share: ¥44.29.
Note: Performance forecasts are based on the best information available at this time,
but actual results may diverge from these forecasts due to a variety of factors whichcannot be foreseen.
IV. Overview of Consolidated Results
1. Consolidated group results
The Japanese economy continued its recovery during the April to June quarter, withstrong corporate results, increased consumer spending, and improved employment.
The operating environment nevertheless remained challenging as prices for petroleum
and petrochemical feedstocks such as naphtha continued to rise.
Asahi Kasei’s consolidated net sales for the quarter were ¥348.5 billion, anincrease of ¥19.9 billion (6.0%) from a year ago, with strong overseas demand forchemicals. Operating profit was ¥15.3 billion, an increase of ¥1.7 billion (12.4%),
with strong performance in electronics products. Ordinary profit was ¥15.1 billion,
an increase of ¥0.5 billion (3.2%), and net income was ¥9.2 billion, an increase of ¥4.0billion (76.8%).
2. Results by operating segment
CHEMICALS
Sales increased by ¥23.6 billion (15.4%) from the first quarter a year ago to ¥177.1billion and operating profit decreased by ¥1.4 billion (19.9%) to ¥5.5 billion.
Operating profit in volume products was lower than a year ago. In polymers
and elastomers, overseas engineering resin subsidiaries performed well. Monomers
and basic chemicals were affected by high feedstock costs for acrylonitrile and styrene,and by the cost of the regular maintenance turnaround.
Operating profit in specialty products and systems grew, with strong
performance in Hipore™ microporous membrane for Li-ion rechargeable batteries andin ion-exchange membrane electrolysis systems.

Asahi Kasei
Consolidated Results

July 27, 2006
p. 2/6

HOMES
Sales decreased by ¥13.1 billion (18.3%) from the first quarter a year ago to ¥58.6
billion and the operating loss increased by ¥1.8 billion to ¥3.7 billion. Orders fororder-built homes rose by ¥8.2 billion (10.9%) to ¥83.8 billion.
Real estate and remodeling operations performed well, but operating
profitability for the segment declined with fewer deliveries of unit homes in order-built
homes operations had and fewer deliveries of condominium units in pre-built homes
operations.
PHARMA
Sales decreased by ¥1.1 billion (3.9%) from the first quarter a year ago to ¥26.0 billion
and operating profit increased by ¥1.1 billion (29.7%) to ¥4.7 billion.
Reimbursement prices decreased for both pharmaceuticals and medical devices
but operating profit for the segment increased with increased shipments of Flivas™
therapy for benign prostatic hypoplasia and of APS™ polysulfone-membrane artificial
kidneys, and with increased pharmaceuticals licensing income.
FIBERS
Sales increased by ¥2.5 billion (12.2%) from the first quarter a year ago to ¥23.0 billion
and operating profit decreased by ¥0.3 billion (39.0%) to ¥0.5 billion.
Shipments of Roica™ elastic polyurethane filament increased, but operating
profit for the segment decreased with elevated feedstock costs throughout.
ELECTRONICS MATERIALS & DEVICES
Sales increased by ¥3.5 billion (14.5%) from the first quarter a year ago to ¥27.7 billion
and operating profit increased by ¥2.4 billion (59.4%) to ¥6.4 billion.
Operating profit for the segment increased with increased shipments ofSunfort™ photosensitive dry film resist for printed wiring boards and of LSIs, andwith strong demand for electronic materials and electronic devices in IT and homeelectronics applications.
CONSTRUCTION MATERIALS
Sales increased by ¥1.8 billion (14.2%) from the first quarter a year ago to ¥14.7 billion
and operating profit increased by ¥0.8 billion (a multiple of 3.7) to ¥1.0 billion.
Operating profit for the segment grew with increased sales of Hebel™ and Hebel
Powerboard™ ALC panels, strong performance in foundation systems centered on
small-scale piles, and generally healthy demand in construction markets.
LIFE & LIVING
Sales increased by ¥0.4 billion (3.2%) from the first quarter a year ago to ¥12.8 billion
and operating profit decreased by ¥0.1 billion (14.2%) to ¥0.8 billion.
Packaging products operations performed on par with a year ago, but home-use
products operations were impacted by higher advertising costs for Saran Wrap™ andby elevated feedstock costs, and operating profit for the segment decreased.
SERVICES, ENGINEERING AND OTHERS
Sales increased by ¥2.1 billion (32.9%) from the first quarter a year ago to ¥8.6 billion
and operating profit increased by ¥0.9 billion (a multiple of 2.4) to ¥1.5 billion.
Engineering operations and personnel staffing and placement operations
performed well.

Asahi Kasei
Consolidated Results

July 27, 2006
p. 3/6

V. Consolidated Statements of Income

328,625
250,797
77,828

Increase(decrease)
19,85816,8563,002

Percentchange
+6.0
+6.7
+3.9

65,53264,215

1,317

+2.1

15,2972,062
2,296
15,064327
750

13,612
2,656
1,667
14,601
159
5,785

1,685(594)
629
463
168
(5,035)

+12.4
−22.4
+37.7
+3.2
+105.7−87.0

14,641

8,975

5,666

+63.1

9,184

5,195

3,989

+76.8

Q1 2006

Q1 2005348,483
267,653
80,830Net sales
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Special gains
Special losses
Income before income taxes
and minority interests
Net income
VI. Consolidated Balance Sheets

AssetsCurrent assets
Fixed assets
Property, plant and equipment
Intangible fixed assets
Investments and other assets
Total assets

Asahi Kasei
Consolidated Results

At end ofJune 2006

At end ofMarch 2006

Increase(decrease)672,268
737,436
424,811
31,129281,497
1,409,705644,192
731,852
414,368
33,094284,390
1,376,044

28,076
5,584
10,443(1,965)(2,893)
33,661

July 27, 2006
p. 4/6

Liabilities
Current liabilities
Long-term liabilities
Total liabilities
Net assets
Stockholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock, at cost
Valuation, transition adjustment
and others
Minority interest in consolidated
subsidiaries
Total net assets
Total liabilities, and net assets
Minority interest in consolidated
subsidiaries
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
OthersTreasury stock, at cost
Total shareholders’ equity
Total liabilities, minority interestand shareholders’ equity

At end ofJune 2006

At end ofMarch 2006

Increase(decrease)482,386
325,607807,992

439,724
335,193774,916

42,662(9,586)33,076509,878
103,389
79,438344,436(17,385)

—
—
—
—
—

—
—
—
—
—

84,842

—

—

6,992

—

—

601,712
1,409,705

—
—

—
—

—

6,917

—

—
—
—
—
—
—

103,389
79,433
342,450
86,251(17,311)594,211

—
—
—
—
—
—

—

1,376,044—

VII. Cash flowsCash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Effect of exchange rate changes on cash andcash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of term
Cash and cash equivalents held by newly
consolidated subsidiaries
Cash and cash equivalents at end of term

Asahi Kasei
Consolidated Results

Q1 2006(11,554)(15,519)
7,739

Q1 2005(14,653)(10,331)
5,279

104

114

(19,231)
86,390(19,591)
68,4562,236—

69,39548,865

July 27, 2006
p. 5/6

VIII. Operating Segment Information
1. Consolidated net sales

Chemicals
Homes
PharmaFibersElectronics Materials & Devices
Construction Materials
Life & Living
Services, Engineering and Others
Total

Q1 2006

Q1 2005

177.1
58.6
26.0
23.0
27.7
14.7
12.8
8.6
348.5

153.4
71.7
27.1
20.5
24.2
12.9
12.4
6.5
328.6

2. Consolidated operating profit (loss)

Chemicals
Homes
PharmaFibersElectronics Materials & Devices
Construction Materials
Life & Living
Services, Engineering and Others
Corporate expenses andeliminations
Consolidated

Increase(decrease)
23.6(13.1)
(1.1)
2.5
3.5
1.8
0.4
2.1
19.9

(billions of yen)First half FY
2006 forecast
369.0
167.0
52.0
49.0
57.0
29.0
27.0
17.0
767.0

(billions of yen)
Increase
First half FY(decrease) 2006 forecast
(1.4)
16.5
(1.8)
6.5
1.1
5.0(0.3)
1.0
2.4
11.5
0.8
2.0
(0.1)
2.0
0.9
2.0

Q1 2006

Q1 2005

5.5
(3.7)
4.7
0.5
6.4
1.0
0.8
1.5

6.9(1.9)
3.6
0.9
4.0
0.3
1.0
0.6(1.6)

(1.9)

0.3

(3.5)

15.3

13.6

1.7

43.0

3. Contract trends for home construction operations

Value of orders received(¥ billion)
No. of orders received(home units)
Backlog of orders(¥ billion)
No. of sales (home units)
Value of sales (¥ billion)

Q1
2006

Q1
2005

Increase(decrease)

First half FY
2006 forecast

83.8

75.6

8.2

167.0

3,720

3,239

481

7,221

344.3

336.9

7.4

337.4

1,959
43.5

2,399
48.7

(440)
(5.2)

6,158
133.6

Q1
2006

Q1
2005

Increase(decrease)

First half FY
2006 forecast

49,00037,50011,50052,0001151087115

4. Key operating factors

Naphtha price(yen/kL, domestic)
Yen/US$ exchange rate
(market average)

Asahi Kasei
Consolidated Results

July 27, 2006
p. 6/6