For Immediate Release
May 9, 2008

Sumitomo Chemical Company, Limited
Announces Consolidated Financial Results
During the first half of the fiscal year ending March 31, 2008 (FY2007), Japan’s economy
continued its moderate growth supported by continued strong exports as well as increased
capital expenditures owing to improved corporate earnings. However, during the second
half, further hikes in the price of crude oil, fears of a recession in the US from the subprime
mortgage crisis, and the sharp rise in the yen resulted in lower corporate earnings andtightened capital expenditures, causing Japan’s economic growth to slow toward the endof FY2007.
In FY2007 the Company faced a challenging operating environment. Prices of naphtha,benzene and other major feedstocks increased considerably and the yen rose sharply,
though shipments for products such as IT-related materials saw a recovery in the overseas
market.
Under these circumstances, the Company sought to improve its earnings by expanding
sales, reducing costs and increasing sales prices in response to the hikes in raw materialcosts. As a result, consolidated net sales for FY2007 increased by ¥106.5 billion over theprevious year to ¥1,896.5 billion. The Company posted operating income of ¥102.4 billion,
ordinary income of ¥92.8 billion, and net income of ¥63.1 billion, all of which represent a
decrease compared with the previous fiscal year owing to rising feedstock costs andincreased depreciation and research and development expenses.
The Company’s consolidated financial performance for FY2007 by segment is as follows.
In the Basic Chemicals segment, sales for caprolactam and acrylonitrile, raw materials forsynthetic textile fibers, as well as methyl methacrylate and other products increased
thanks to firm demand and improved prices reflecting higher raw materials costs.
Meanwhile, sales for aluminum decreased since the Company curtailed a portion of its
aluminum resale operations. Consequently, the segment’s sales remained almost flat fromthe previous year at ¥314.7 billion, while operating income decreased by ¥2.9 billion to¥10.6 billion because of rising feedstock prices and increased in fixed costs.
In the Petrochemicals and Plastics segment, sales of synthetic resins increased on theback of higher prices in Asian markets and increases in selling prices in Japan made inresponse to the rising cost of feedstocks. Sales of petrochemical products also increased
with higher market prices. The segment’s sales increased by ¥64.3 billion to ¥603.3 billion,
while operating income decreased by ¥19.1billion to ¥4.5 billion, reflecting the effects of arise in feedstock prices that exceeded the increase in selling prices as well as the impact ofa large-scale periodical maintenance shutdown of manufacturing plants undertaken oncein four years.
In the Fine Chemicals segment, sales of pharmaceutical intermediates increased thanks tofirm shipments. Sales of specialty chemicals remained flat from the previous year becauseof weak demand from the housing sector and other factors. As a result, sales increased by¥2.1 billion to ¥92.9 billion, while operating income decreased ¥1.7 billion to ¥11.4 billion.
In the IT-related Chemicals segment, sales volumes of polarizing film, a material for liquid
crystal displays (LCDs) increased significantly, helped by production capacity expansions
in response to strong demand in Korea, Taiwan and China. Though the decline in selling
prices moderated somewhat from the beginning of FY2007, the average selling price for
FY2007 represented a considerable decrease compared with the previous year. Sales ofcolor filters, diffusion panels, liquid crystal polymers and other products increased thanks
to firm shipments. The segment’s sales increased ¥31.1 billion to ¥297.5 billion, andoperating income increased by ¥2.8 billion to ¥6.3 billion.
In the Agricultural Chemicals segment, sales of agrochemicals in Japan increased becauseof a recovery in shipments due to the completion of inventory adjustments by customers.
Feed additives saw an increase in sales owing to higher selling prices on the back of anincrease in demand. Shipments of household insecticides in the overseas market were firm.
Consequently, sales increased by ¥2.1 billion to ¥200.4 billion. Despite the rise in sales
prices and increase in shipment volumes, operating income decreased by ¥2.3 billion to¥20.9 billion because of one-time costs associated with the integration of Sumitomo
Chemical Takeda Agro.

In the Pharmaceuticals segment, sales of Dainippon Sumitomo Pharma’s four main
products, Amlodin (therapeutic agent for hypertension and angina), Gasmotin(gastroprokinetic), Meropen (carbapenem antibiotic), and Prorenal (vasodilator) remained
firm. The segment’s sales increased by ¥3.0 billion to ¥237.6 billion, while operating income
decreased by ¥9.8 billion to ¥46.5 billion because of increases in research anddevelopment and other expenses.
In the Others segment, the Company provides electrical power and steam, services forchemical plant engineering and design, transport and warehousing, and materials andenvironmental analysis, and conducts business development in new fields such asPolymer Organic Light Emitting Diodes (PLEDs). Sales increased ¥3.3 billion over theprevious year to ¥150.1 billion, while operating income declined ¥4.3 billion to ¥3.7 billion.
While, the Company posted a ¥28.8 billion special gain on change in equity by affiliate
stock offering from Petro Rabigh’s listing on the Saudi Stock Exchange, net income
decreased by ¥30.8 billion to ¥63.1 billion. This was caused by a decrease in operating
income and losses on foreign currency transactions.
Sumitomo Chemical plans to pay a year-end dividend of 6 yen per share. The Company’s
annual dividend of 12 yen per share, including its interim dividend, will remain the same asfor FY2006.
Net cash provided by operating activities in FY2007 was ¥156.6 billion, and net cash used
for investing activities totaled ¥182.7 billion, including the acquisition of a PLED company
and investment in the Rabigh Project. This resulted in a free cash flow of negative ¥26.1
billion, a ¥4.8 billion decrease compared with the previous year.
The Company projects FY2008 consolidated sales of ¥2,080.0 billion, an increase of 9.7%
over FY2007. Operating income is anticipated to be ¥95.0 billion, a 7.2% decrease due tothe stronger yen and increased research and development expenses. The Company
expects no special gain, which it posted in FY2007, and net income is anticipated to be¥55.0 billion, a decrease of 12.8%. The estimated dividend for FY 2008 is ¥12 per share, thesame level as for FY2007.

Consolidated Statements of Income
Years ended March 31, 2008(FY2007) and 2007(FY2006)
FY2007

FY2006(¥Million)(US$1,000)*(¥Million)¥ 1,896,539$18,929,424¥ 1,790,026

1,454,416

14,516,579

1,338,142

339,726

3,390,817

312,261

102,397

1,022,028

139,623

9,250

92,325

7,137Interest expense(12,004)(119,812)(11,034)

Equity in earnings of affiliates

11,161

111,398

23,607

Gain on sale of securities

6,719

67,06331,079Restructuring charges(4,766)(47,570)(6,378)Gain on change in equity
by affliate stock offering

28,767287,124-

Gain on sale ofproperty, plant and equipment

4,734

47,250-

Expenses related to litigation--(1,010)Loss on reform ofretirement benefits plan--(611)(18,014)(179,798)(1,352)

128,244

1,280,008

181,061

Income taxes, net of tax effect44,133

440,493

65,916

Minority interests

21,028209,881

21,285

Sales
Cost of sales
Selling, generaland administrative expenses
Operating income
Other income (expenses):
Interest and dividend income

Other, net
Income before income taxes
and minority interests

Net income¥

63,083$

629,634

FY2007¥

93,860FY2006(Yen)(US dollar)*¥38.20

$0.38

¥

56.82

Interim dividends

¥

6.00

$0.06

¥

5.00Year-end dividends

¥

6.00

$0.06

¥

7.00

For the year¥

12.00

$0.12

¥

12.00

Net income per share(Yen)Dividends per share:(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥100.19= $1 prevailing on March 31, 2008.

Consolidated Statements of Cash Flows
Years ended March 31, 2008(FY2007) and 2007(FY2006)
FY2007

FY2006(¥Million)(US$1,000)*(¥Million)

128,244$ 1,280,008

Depreciation and amortization

124,980

1,247,430

113,870

Gain on change in equity by affliate stock offering(28,767)(287,124)-Gain on sale of investment securities(6,719)(67,063)(31,079)

Income taxes paid

(50,278)(501,827)(39,367)

Other, net(10,882)(108,613)(81,568)

Net cash provided by operating activities

156,578

1,562,811

142,917

Acquisition of securities(27,659)(276,065)(10,188)

Proceeds from sale of securities

15,469154,397

44,557

Acquisition of investments(22,319)(222,767)(33,212)Acquisition of property, plant and equipment(127,083)(1,268,420)(156,924)

Acquisition of shares of newly consolidated subsidiaries(30,561)(305,030)

-

9,474

94,559(8,472)(182,679)(1,823,326)(164,239)

Dividends paid

(21,482)(214,413)(18,182)

Net increase in short-term debt

14,417

143,897

31,108Net increase in long-term debt

22,745

227,019

29,983

Other, net(8,590)(85,737)(7,351)

Net cash provided by (used in) financing activities

7,090

70,76635,558

252

2,515

781

(18,759)(187,234)

15,017

98

978

-79

788

1125,990

1,257,511

110,972

107,408$ 1,072,043

Cash flows from operating activities:Income before income taxes and minority interests¥¥

181,061

Cash flows from investing activities:

Other, net
Net cash used in investing activities
Cash flows from financing activities:

Effect of exchange rate changes
on cash and cash equivalents
Net increase(Decrease) in cash and cash equivalents
Increase in cash due to mergerof consolidated subsidiaries
Net increase (Decrease) in cash resulting fromchanges in the number of consolidated subsidiaries
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year¥(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥100.19= $1 prevailing on March 31, 2008.

¥125,990

Industry Segment Results
Years ended March 31, 2008(FY2007) and 2007(FY2006)(¥Million)
Basic
ChemicalsPetrochemicals&Plastics¥ 314,718¥ 603,326(Share)(16.6%)(Growth)(0.2%)

Fine
Chemicals

IT-related
Chemicals

Agricultural
Chemicals

Pharmaceuticals

Others¥

92,937¥ 297,515¥ 200,378¥ 237,592¥ 150,073(31.8%)(4.9%)(15.7%)(10.6%)(12.5%)(7.9%)(100.0%)(11.9%)(2.3%)(11.7%)(1.0%)(1.3%)(2.2%)(6.0%)

Adjustments&Elimination

Consolidated

FY2007
Sales

Operatingincome (loss)[a]¥

10,559

¥

4,518

¥

11,430

¥

6,290

¥

20,914¥

46,464

¥

3,688

¥

¥ (1,466)

1,896,539¥

102,397[b](3.4%)(0.7%)(12.3%)(2.1%)(10.4%)(19.6%)(2.5%)

Total assets¥ 257,102¥ 591,226¥ 102,930¥ 299,498¥ 240,398¥ 449,496¥ 337,518

Depreciation

13,305

18,377

6,080

42,19012,791

15,37011,064

5,803

124,980

Capitalexpenditures

27,646

21,1996,929

33,355

8,451

18,28318,448

8,210

142,521¥ 314,004¥ 539,065

90,882¥ 266,436¥ 198,310¥ 234,546¥ 146,783(Share)(17.5%)(30.1%)(5.1%)(14.9%)(11.1%)(13.1%)(8.2%)(100.0%)(Growth)(24.4%)(10.9%)(15.0%)(16.2%)(6.5%)(0.6%)(62.1%)(15.0%)[b] / [a](5.4%)¥

80,761¥

2,358,929

FY2006
Sales

Operatingincome (loss)[a]¥

13,483¥

23,596¥¥

13,085

¥

3,457

¥

23,251¥

56,231

¥

8,012

¥

¥ (1,492)

1,790,026¥

139,623[b](4.3%)(4.4%)(14.4%)(1.3%)(11.7%)(24.0%)(5.5%)

Total assets¥ 253,604¥ 539,466¥ 100,697¥ 325,647¥ 232,120¥ 419,526¥ 281,380¥ 172,466

Depreciation

13,515

19,156

6,538

31,453

14,213

16,207

6,740

6,048

113,870

Capitalexpenditures

24,633

16,878

4,635

72,034

10,122

12,496

13,697

5,354

159,849[b] / [a](7.8%)¥2,324,906

Overseas Operations
Years ended March 31, 2008(FY2007) and 2007(FY2006)
FY2006

FY2007(¥Million)
Overseasoperations¥

788,804($1,000)*

Share (%)

Growth (%)$7,873,08141.6

5.5(Note)*U. S. dollar amounts are translated from yen, for convenience only, at the rate of¥100.19= $1 prevailing on March 31 2008.

(¥Million)¥747,770

Non-consolidated Statements of Income
Years ended March 31, 2008(FY2007) and 2007(FY2006)
FY2007

FY2006(¥Million)(US$1,000)*(¥Million)¥ 933,291$ 9,315,211¥ 885,557

Cost of sales
Selling, generaland administrative expenses

805,079

8,035,523

738,224

113,921

1,137,039

101,405

Operating income

14,292

142,649

45,928Other income

37,142

370,716

38,509Other expenses

21,151

211,109

13,84130,283302,256

70,595Special gains

7,169

71,55443,301

Special losses

8,211

81,955

2,197

29,241

291,855

111,699

5,875

58,63827,988

Sales

Ordinary income

Income before income taxes
Income taxes
Net income¥

23,366$233,217¥83,711(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥100.19= $1 prevailing on March 31, 2008.
(Cautionary Statement)
Statements made in this release with respect to the Company ’ s current plans, estimates, strategies
and beliefs that are not historical facts are forward-looking statements about the future performanceof Sumitomo Chemical. These statements are based on management ’ s assumptions and beliefs inlight of the information currently available to it, and involve risks and uncertainties. The importantfactors that could cause actual results to differ materially from those discussed in theforward-looking statements include, but are not limited to, general economic conditions in Sumitomo
Chemical ’ s markets; demand for, and competitive pricing pressure on, Sumitomo Chemical ’ s
products in the marketplace; Sumitomo Chemical ’ s ability to continue to win acceptance for its
products in these highly competitive markets; and movements of currency exchange rates.