For Immediate Release
May 10, 2007

Sumitomo Chemical Company, LimitedAnnounces Consolidated Financial Results
Sumitomo Chemical Company, Limited today announced that its consolidated net sales for the year
ended March 31, 2007 (FY 2006) totaled ¥1,790.0 billion ($15,163 million), an increase of 15.0% overFY 2005. The Company posted operating income of ¥139.6 billion ($1,183 million) and net income of¥93.9 billion ($795million). Each of these results is a record high for the Company.
The Company decided to pay year-end dividends of ¥7 per share, thereby raising the annualdividend from ¥10 per share for FY2005 to ¥12 for FY2006.
Sales in the Basic Chemicals segment increased by ¥61.6 billion over last year to ¥314.0 billion. Theincrease was due to a substantial increase in sales of aluminum because of a rise in the market
price compared with last year. Also production capacity expansions for both methyl methacrylate(MMA) and caprolactam, the raw material for synthetic fibers, contributed to the sales growth. The
Petrochemicals & Plastics segment saw sales rise by ¥53.0 billion over last year to ¥539.1 billion.
Sales of styrene monomer and other petrochemicals increased on the back of favorable market
conditions that supported price increases taken in response to the rising prices of feedstocks suchas naphtha. Firm sales of synthetic resins also contributed to the segment’s improved year-on-yearperformance. Sales in the Fine Chemicals segment increased by ¥11.9 billion year on year to ¥90.9billion. The increase was due to favorable sales of adhesives raw materials driven by firm demand
as well as increased sales of pharmaceutical chemicals thanks to an increase in shipments ofpharmaceutical intermediates. Although sales prices for optical materials fell, total sales in theIT-related Chemicals segment increased by ¥37.2 billion over last year to ¥266.4 billion as a resultof capacity expansions in Korea etc, for polarizing films, a primary material for liquid crystal
displays. Sales in the Agricultural Chemicals segment increased by ¥12.1 billion over last year to¥198.3 billion. Feed additives and household insecticides saw increases in overseas sales owing toactive marketing drives. Production capacity expansion contributed to an increase in OLYSET®NETshipments. Sales of agrochemicals declined because of weak demand in the Japanese market,
while overseas sales of herbicides remained firm thanks to solid shipments. Sales in thePharmaceuticals segment increased by ¥1.4 billion over the previous year to ¥234.5 billion. In spiteof NHI drug price reduction in April of last year, sales of Dainippon Sumitomo Pharma Co., Ltd.
(DSP)’s four main products, Amlodin (therapeutic agent for hypertension and angina), Gasmotin(gastroprokinetic), Meropen (carbapenem antibiotic), and Prorenal (vasodilator) remained firm.
Total operating income increased by ¥18.8 billion to ¥139.6 billion. Operating income in the Basic
Chemicals segment increased by ¥3.5 billion year on year to ¥13.5 billion, and in thePetrochemicals & Plastics segment it increased by ¥5.7 billion year on year to ¥23.6 billion.
Operating income in the Fine Chemicals segment increased by ¥3.3 billion to ¥13.1 billion, while in
the IT-related Chemicals segment, it declined year on year by ¥18.2 billion to ¥3.5 billion because ofdecreasing selling prices as well as increases in depreciation and various fixed costs. In theAgricultural Chemicals segment, operating income increased by ¥6.7 billion to ¥23.3 billion, and inthe Pharmaceuticals segment it increased by ¥17.9 billion to ¥56.2 billion. The merger of theCompany’s pharmaceutical subsidiary, Sumitomo Pharmaceuticals Co., Ltd., with Dainippon
Pharmaceutical Co., Ltd. in October 2005 to form DSP increased the scale of the Pharmaceuticals
segment’s operations.
Net income also increased over the previous year by 3.5% to ¥93.9 billion, due mainly to an
extraordinary gain on sale of investment securities, including shares of GlaxoSmithKline K.K., inaddition to the growth in operating income.
Net cash provided by operating activities was ¥142.9 billion ($1,211 million), and net cash used forinvesting activities totaled ¥164.2 billion ($1,391 million), involving expenditures in the IT-related
Chemicals segment, the Rabigh project in Saudi Arabia and other areas. Free cash flow improvedby ¥36.6 billion from a year before to negative ¥21.3 billion ($181 million), as a result of an increasein net cash provided by operating activities.
For FY 2007, consolidated sales of ¥1,910 billion ($16,180 million) are projected, an increase of 6.7%
over FY2006. Operating income is anticipated to be ¥130 billion ($1,101 million), a 6.9% decrease
due to scheduled maintenance shutdown in our petrochemical plants, among other reasons. And
as we expect no extraordinary profit from gain on sales of securities, net income is anticipated tobe ¥70 billion ($593 million), a decrease of 25.4%. The estimated dividend for FY2007 is ¥12 pershare staying at the same level as FY 2006 Dividend.
(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥118.05 = $1 prevailing on March 31, 2007.

Consolidated Statements of IncomeYears ended March 31, 2007(FY2006) and 2006(FY2005)
FY2006

FY2005(¥Million)(US$1,000)*(¥Million)¥ 1,790,026$15,163,287¥ 1,556,606

1,338,142

11,335,383

1,138,536

312,261

2,645,159

297,280

139,623

1,182,745

120,790

7,137

60,4575,698Interest expense(11,034)(93,469)(7,917)

Equity in earnings of affiliates

23,607

199,975

26,815Gain on sale of securities

31,079263,270

8,276

Restructuring charges(6,378)(54,028)(5,853)

Expenses related to litigation(1,010)(8,556)-

Loss on reform ofretirement benefits plan(611)

(5,176)-

Gain on change in interests
in consolidated subsidiary--

14,273Gain on business transfer

-

-

4,516

Gain on sale ofproperty, plant and equipment--

Expenses for subsidiary merger--(6,116)(1,352)(11,453)(4,259)181,061

1,533,765

158,591

Income taxes, net of tax effect65,916558,374

51,525

Minority interests

21,285

180,305

16,401

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¥

93,860$795,087

FY2006

2,368¥

90,665

FY2005(Yen)(US dollar)*

¥

56.82

$

0.48

¥

54.80

Interim dividends

¥

5.00

$0.04

¥

4.00

Year-end dividends

¥

7.00

$

0.06

¥

6.00

For the year¥

12.00

$

0.10

¥

10.00

Net income per share(Yen)

Dividends per share:(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥118.05= $1 prevailing on March 31, 2007.

Industry Segment Results
Years ended March 31, 2007(FY2006) and 2006(FY2005)(¥Million)
Basic
ChemicalsPetrochemicals&Plastics¥ 314,004¥ 539,065(Share)(17.5%)(Growth)(24.4%)

Adjustments&Elimination

Consolidated

Fine
Chemicals

IT-related
Chemicals

Agricultural
Chemicals

Pharmaceuticals

Others

¥90,882¥ 266,436¥ 198,310¥ 234,546¥ 146,783(30.1%)(5.1%)(14.9%)(11.1%)(13.1%)(8.2%)(100.0%)(10.9%)(15.0%)(16.2%)(6.5%)(0.6%)(62.1%)(15.0%)

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](7.8%)(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

10,12212,496

13,697

5,354

159,849¥ 252,399¥ 486,054

79,011¥ 229,240¥ 186,232¥ 233,101(Share)(16.2%)(31.2%)(5.1%)(14.7%)(12.0%)(15.0%)(5.8%)(100.0%)(Growth)(11.8%)(17.8%)(-6.0%)(31.2%)(8.5%)(36.6%)(59.5%)(20.1%)[b] / [a]¥2,324,906

FY2005
Sales

Operatingincome (loss)

[a]

¥

9,994

¥

17,918

¥

¥

9,826

¥

21,704¥

16,578¥38,286¥¥90,569¥5,762¥ (△722)

1,556,606¥

120,790[b](12.4%)(9.5%)(8.9%)(16.4%)(6.4%)

95,046¥ 266,789¥ 224,339¥ 434,329¥ 266,072¥ 186,979

18,776

6,729

24,934

15,20914,187

6,980

6,268

104,906

16,102

7,007

43,9908,843

10,566

7,978

9,709

124,925(4.0%)(3.7%)

Total assets¥ 216,480¥ 488,343

Depreciation

11,823

Capitalexpenditures

20,730[b] / [a]¥(7.8%)¥

2,178,377

Overseas Operations
Years ended March 31, 2007(FY2006) and 2006(FY2005)
FY2005

FY2006(¥Million)
Overseasoperations¥

747,770($1,000)*

Share (%)

Growth (%)$6,334,350

41.8

22.4(Note)*U. S. dollar amounts are translated from yen, for convenience only, at the rate of¥118.05= $1 prevailing on March 31 2007.

(¥Million)¥

610,951

Consolidated Statements of Cash Flows
Years ended March 31, 2007(FY2006) and 2006(FY2005)
FY2006

FY2005(¥Million)(US$1,000)*(¥Million)

181,061$ 1,533,765

Depreciation and amortization

113,870

964,591

104,906

Income taxes paid

(39,367)(333,477)(50,296)

Other, net(112,647)(954,231)(90,418)

Net cash provided by operating activities

142,917

1,210,648

122,783

Acquisition of securities(10,188)(86,302)(30,384)

Acquisition of investments(33,212)(281,338)(41,983)

Acquisition of property, plant and equipment(156,924)(1,329,301)(121,601)

36,085

305,675

13,289(164,239)(1,391,266)(180,679)

Dividends paid

(18,182)(154,019)(14,880)

Net increase in short-term debt

31,108263,515

38,184

Net increase in long-term debt

29,983

253,986

57,831Other, net(7,351)(62,271)(10,554)

Net cash provided by (used in) financing activities

35,558301,21170,581

781

6,616

1,002

15,017127,209

13,687--42,12119(78)

110,972

940,042

55,242125,990$ 1,067,260

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

158,591

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 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¥118.05= $1 prevailing on March 31, 2007.

¥110,972

Non-consolidated Statements of Income
Years ended March 31, 2007(FY2006) and 2006(FY2005)
FY2006

FY2005(¥Million)(US$1,000)*(¥Million)¥ 885,557$ 7,501,542¥ 755,037

Cost of sales
Selling, generaland administrative expenses

738,224

6,253,486

623,916

101,405

859,000

100,325

Operating income

45,928389,055

30,795

Other income

38,509326,209

43,896

Other expenses

13,841

117,247

12,53270,595598,009

62,159Special gains

43,301

366,802

7,980

Special losses

2,197

18,611

3,737

111,699

946,201

66,402

27,988237,086

15,446

Sales

Ordinary income

Income before income taxes
Income taxes
Net income¥

83,711$709,115¥

50,956(Note)*U.S. dollar amounts are translated from yen, for convenience only, at the rate of¥118.05= $1 prevailing on March 31, 2007.
(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 ’ sproducts 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.